Biocon's palor turns pale

Biocon is looking very pale and sickly today on the bourses. The stock dropped today almost 3.5% at Rs.553.15; it has recovered from this low level but continues to remain in the red at Rs.562 levels.

The company announced today that the US FDA has completed the pre-approval inspection of its manufacturing facility in Malaysia. Post this, it has received a Form 483 with 6 observations.

FDA has asked the company to respond with a corrective and preventive action plan in a timely manner.

This plant is very crucial as it is the Malaysian plant which is Asia’s largest integrated insulins manufacturing facility. Its product, Glargine from this unit is the one that received the FDA nod and that in turn is that triggered off this inspection at the plant.

The commercial launch of Glargine is scheduled for 2020 thus the material impact of these observations is zero on the revenue; yet psychological, any FDA observation dents the confidence.