IPCA Labs under FDA radar

IPCA Labs is down in the dumps today. The stock has slumped 11.5% or by over Rs.87 at Rs.672.85 with an intra day low at Rs.665.25. Volumes are huge at almost 5.5 lakh compared to 2-week average of 1.30 lakh shares.

The US FDA bug has afflicted this company too. The company has informed that it has received an import alert from the FDA for two of its unit at Pithampur and Silvassa. Its Indore facility too had received FDA observations, which were stated to be critical. All this apart, its biggest US FDA approved facility at Ratlam too had received an import alert in January, citing violations of standard production practices.

The two formulation units at Pithampur and Silvassa use the APIs from Ratlam unit for the US market. The voluntary stoppage of API shipments from Ratlam has thus affected two other units too and now they too are under the FDA radar.

Since July 2014, the company has not shipped either any formulation or API to USA, except for the two drugs which were exempted by the FDA from import alert.