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Monday blues hit pharma stocks, most down in early trade

Shares of Indian pharmaceutical companies started the week on a subdued note, with most down on Monday. Multiple regulatory developments over the weekend marred sentiment for the stocks.

Sun Pharmaceutical Industries Ltd, Cipla, Aurobindo Pharma Ltd, and Glenmark Pharmaceuticals Ltd were all under pressure, with the Nifty Pharma index down more than 2% in early deals on Monday.

According to a Mint report, the Central Pollution Control Board (CPCB) is likely to tweak waste treatment rules for pharmaceuticals companies that would reduce the time taken to get environmental approvals for change in product mix. CPBC is examining a proposal to change effluent treatment norms after the Indian Drug Manufacturers’ Association sought tweaks to existing regulations that act as hurdles to manufacturing.

This, however, has failed to revive sentiment so far today.

Shares of Glenmark Pharma fell over 9% in today’s session after the US Food and Drug Administration (US FDA) issued a warning letter to the company’s manufacturing facility in Baddi, Himachal Pradesh. The warning letter comes following adverse observations during an inspection in April. The company, however, does not expect a significant financial hit from the warning letter, as there are no major pending product approvals from the facility in the next 12 months.

Shares of Aurobindo Pharma traded more than 7% lower at 525.55 rupees, while those of Sun Pharma were down 2.5% at 377.15 rupees. Shares of Cipla, Lupin Ltd, Cadila Healthcare Ltd were down 1.5-2.5%.

In another development, the US FDA issued an establishment inspection report to Dr Reddy’s bulk drug manufacturing plant 2 at Bollaram near Hyderabad, indicating closure of the audit done in July. The regulator, however, indicated that the observations did not require immediate redressal as they were made in a Form 483 as Voluntary Action Initiated. The stock was down a 0.5%.