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Research
Views on update of USFDA warning letter on Dr. Reddys Lab (DRL): Angel Broking
Posted On : 2015-11-27 21:41:38( TIMEZONE : IST )
Views of Ms. Sarabjit Kour Nangra (VP Research - Pharma, Angel Broking):
Update on USFDA warning letter on Dr. Reddy's Lab (DRL)
"Details available from a warning letter issued to DRL on November 5, 2015, shows that Units VI (in Srikakulam, Andhra Pradesh) and V (Nalgonda, Telangana) facilities, had significant deviations from current GMP for the manufacture of APIs. At Unit-VII (Visakhapatnam, AP) they found significant violations of CGMP regulations for finished pharmaceuticals.
The inspection team also "discovered" the presence of an uncontrolled "Custom QC laboratory" at the Srikakulam facility, the existence of which was previously unknown to USFDA. An official at the facility acknowledged that the laboratory was involved in CGMP analysis of APIs intended for export to the US through 2012, the regulator said. Stating that it has got nine responses from the company, between December 2014 and September 2015, the regulator said they lack sufficient corrective actions. Among the failures listed were those to maintain complete data derived from all laboratory tests, including to prevent unauthorized access or changes to data and to provide adequate controls to prevent omission of data.
Thus, significant deviations from current GMP for manufacture of APIs at two facilities and violations of CGMP regulations for finished pharmaceuticals at another besides presence of a laboratory unknown to the regulator figure in the charges the U.S. Food and Drug Administration has made against DRL. These issues, given quality issues will take some time to get resolved. However, we have already pruned the numbers for worst case scenario coming from these plants. We maintain our BUY rating with a price target of INR 3933."
Shares of DR.REDDY'S LABORATORIES LTD. was last trading in BSE at Rs.3099.1 as compared to the previous close of Rs. 3110.35. The total number of shares traded during the day was 140638 in over 12980 trades.
The stock hit an intraday high of Rs. 3137 and intraday low of 3053. The net turnover during the day was Rs. 434604449.
