Lupin - USFDA update: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research- Pharma, Angel Broking):

The US Food and Drug Administration (USFDA) issues 5 observations for Lupin's Pithampur Unit 3. The nature of these observations is not known. As per the Pithampur site, it is one of the Lupin's largest formulations facility located at Indore Special Economic Zone (ISEZ) and is about 30 Km from Indore city. This is the only site of Lupin having capability to manufacture various finished dosage forms like Tablets, Capsules, Ophthalmics, Dermatological Preparations, Metered Dose Inhalers (MDI), Dry Powder Inhalers (DPI) as well as Active Pharmaceutical Ingredients (API).

This site has 3 sub units, where:

Unit-1 is having dedicated plants for manufacturing of Oral Formulations and Active Pharmaceutical Ingredients (API) (Manufacturing capacity - 1 Billion Tablet/Capsules and 30 to 140 Kg API).

Unit-2 is having dedicated plants for manufacturing of Oral Formulations and Sterile Ophthalmics (Manufacturing capacity - 10 Billion Tablet/Capsules and 6 Million Ophthalmics).

Unit-3 is having dedicated modules for Manufacturing of Dermatological, Metered Dose Inhaler (MDI) and Dry Powder Inhaler (DPI) Formulations (Manufacturing capacity - Derm-6 Million units, MDI-3 Million units, DPI - 178 Million units).

While the sales impact is not know and we are currently we are factoring in the same as the unit is yet to be banned and the management has time to get back to USFDA for resolutions. In terms of future pipeline, the companies' Inhalation segment is estimated to capture 8% of the overall potential sales being targeted (market size of the future pipeline of products). We maintain our BUY rating with a price target of INR 1526.

Shares of LUPIN LTD. was last trading in BSE at Rs.1066.95 as compared to the previous close of Rs. 1094.25. The total number of shares traded during the day was 216564 in over 9565 trades.

The stock hit an intraday high of Rs. 1089.9 and intraday low of 1063.5. The net turnover during the day was Rs. 232764086.

Source : Equity Bulls

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