Divis Labs slips 22% on USFDA report

Shares of Divis Laboratories plunged 22 per cent on Friday--their biggest single day fall ever--on reports of strong observations made by the US Food and Drug Administration on its facility in Vishakhapatnam.

The stock closed at Rs 866.10 — its lowest level since May 2015. The stock plunge eroded almost Rs 830 crore of mutual funds’ holding in the company in a single day. Analysts said the news came as a setback for the company, which has held a good reputation so far as manufacturing practices are concerned.

During the day, the stock fell to as low asRs 821.35, down 26 per cent. The drug co’s Unit-II at Vishakhapatnam was inspected by the US drug regulator between November 29 and December 6 and issued Form 483 with five observations following the inspection.

The company manufactures active pharmaceutical ingredients and intermediates for generics at the plant. The observations are related to data integrity, violation of current good manufacturing practices and improper controls.


Source : http://economictimes.indiatimes.com/