InvestorQ : Why did the Lupin stock fall so sharply on Monday 20th September fall so sharply?
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Why did the Lupin stock fall so sharply on Monday 20th September fall so sharply?

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Deepa Salunkhe answered.
2 months ago
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The problems with the US Food and Drug Administration or FDA continues for Indian pharma companies. On Monday, the stock of Lupin fell 4% after its Goa facility received 7 observations from the USFDA. Normally, when the USFDA issues a warning letter, it is followed up with a second inspection and if the FDA still finds problem, they issue a letter with specific objections to be rectified within a specified time frame. Here is the chain.

The Goa plant was first inspected by the USFDA in March 2017 and Lupin had then received a warning letter. This was followed up with the latest inspection of the plant in Sep-21, during which time, the FDA still found 7 observations. However, Lupin is of the view that these were routine observations and it address these satisfactorily. This is likely to keep the stock under pressure in the short term due to the sentimental impact.

The US FDA has been fairly stringent with Indian pharmaceutical companies in the last few years over lapses during the inspection. The inspection warnings have pertained to sanitation and process protocols pertaining to their plants, laboratories and other facilities. There has been a lot of progress by Indian pharma companies in the last few years, but the pressure has continued on the pharma stocks.

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