Aurobindo Pharma is having a roller coaster day today, despite all the news being of yesterday! The stock price first fell almost 2.5% to Rs.734 and once there was clarification from the company, the price climbed back into the green, going to Rs.761 levels. The news and the clarification happened yesterday and the stock price continues to react today.
The news broken by Reuters said that the company is facing a class action lawsuit in the US over carcinogenic elements in its blood pressure drug. Aurobindo has been named in the lawsuit for alleged contamination of its irbesartan active ingredient (API) used in the treatment of high blood pressure.
The stock exchanges asked for a clarification from the company and it said, “we inform you that we have not yet been served with the legal notice as to the institution of legal proceedings against the company as alleged in the article but we learnt about the alleged proceedings from the media. We further inform you that as and when we receive the notice about the institution of proceedings against the company, we take legal advice and communicate suitably at an appropriate time.”
Well, what this means is that the report is not fake and the company could be facing a class action suit, which it will tackle through the appropriate legal channels.