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Aurobindo Pharma, Glenmark crack on USFDA observations

NEW DELHI: Heavy selling in select pharma players dragged BSE Healthcare index over 2 per cent down in Monday’s trade amid increasing USFDA observations.

Shares of Aurobindo PharmaNSE -18.97 % slipped 19 per cent after reports said the US Food and Drug Administration (USFDA) flagged lack of good manufacturing practices at the company’s Telangana plant.

The scrip alone took off nearly 125 points from the healthcare index, which closed 298 points down at 11,976.

Likewise, Glenmark PharmaceuticalsNSE -9.46 % cracked 9.30 per cent to hit its 52-week low after the company received a warning letter from the US health regulator for its Baddi facility in Himachal Pradesh. The scrip closed Rs 29.30 lower at Rs 286.30.

The regulator had inspected the facility between April 15 and April 20 and earlier classified the inspection as an official action indicated, Glenmark said in a filing to the BSE.

The warning letter issued is regarding the same inspection, it added. “The company is committed to work along with the USFDA to implement all the necessary corrective actions required to address the concerns raised in the letter and is in the process of preparing a detailed response to the USFDA within 15 working days,” Glenmark said.

Some selling in Piramal Enterprises, Sun Pharma, CiplaNSE -2.41 % and Lupin further weighed on the index.

On the other hand, the benchmark BSE Sensex ended the volatile trading session 141 points down at 37,532.

Vinod Nair, Head of Research, Geojit Financial Services said, “Auto, banks and infra sectors are already in subdued condition due to weak demand, while stock-specific buying was seen in a few blue chips in the light of good monsoon and advantages of tax cut. Defensive bets pharma stocks declined due to increasing USFDA observations, while IT slid ahead of earnings season.”