Indoco turns around today

Indoco Remedies had hit the lower circuit filter of Rs.110.70, 20% down on Friday as there was news that the company had received a USFDA warning. But today the stock has turned around, with an over 2.3 times jump in volumes and stock price rising to Rs.111.95, up over 1%, hitting an intra day high at Rs.123.40.

The company, on Friday, late in the evening issued a clarification, stating that it had not received any warning letter from the US FDA. It has stated that its Goa Plant II (Sterile) was first inspected in October 2005, re-inspected in February 2011 and the last inspection was conducted in August 2013 by USFDA. On the last day of inspection, i.e. August 30, 2013, the 483 was issued which is a subject matter of news currently doing the rounds. Responding to this 483s, the company gave a list of corrective actions taken and the proposed actions with completion timelines to address the issues raised in the 483.

Subsequently as the Corrective Actions and Preventive Actions (CAPAs) were executed, updated reports with proof of compliance were sent for USFDA's perusal on October 23, 2013 and November 25, 2013. With the last compliance report sent on November 25, 2013, all the issues stand resolved and the company is awaiting establishment inspection report (EIR), which normally takes 5-6 months time.

This 483 is actually a form, filled out by the FDA after conclusion of the inspection. It indicates when an investigator(s) has observed any conditions that in their judgement may constitute violations of the Food Drug and Cosmetic (FD&C) Act and related Acts. FDA investigators are trained to ensure that each observation noted on the FDA Form 483 is clear, specific and significant. Observations are made when in the investigator’s judgement, conditions or practices observed would indicate that any food, drug, device or cosmetic has been adulterated or is being prepared, packed, or held under conditions whereby it may become adulterated or rendered injurious to health.