IPCA Labs spooked by US FDA

Once again, Bhushan Steel retains the unenviable position as numero uno loser on BSE while the second best loser today is IPCA Labs. The stock, which had closed yesterday at Rs.724.85, opened lower at Rs.676 and tanked to an intra day low at Rs.650. Its 52-week low is at Rs.609. It currently remains down over 5% at Rs.688 levels.

The stock has tanked today following the ‘US FDA’ virus. Like most of other pharma companies, this one too has come under the scanner with the FDA raising concerns over its quality issue at its Ratlam API facility. It has listed six deviations from Good Manufacturing Practices (GMP). From senior staff data falsification, to overwriting previous raw data, falsifying batches, power supply disruption leading to existence of unknown impurity are some of the issues raised by the FDA. This is a serious lapse as FDA is seen to be least tolerant when it comes to data integrity. This could have a bearing on the overall working of the company, if issues are not resolved satisfactorily as it is this Ratlam unit which feeds API to both its other units at Silvassa and Indore.