Orchid Chem slumps

Orchid Chemicals is down almost 4% at Rs.56.30, close to its intra day low at Rs.56.10. Lower circuit filter is at Rs.52.65 and market cap stands at Rs.396 crore.

The stock is down on news that the US Food and Drug Administration (FDA) has rapped Hospira for serious lapses in manufacturing of drugs at its Sriperumbudur unit. Hospira has received a warning letter from the agency which stated that it has found certain violations of quality regulations for the finished drugs. The US FDA has stated that the surfaces were not sanitized, aseptic manufacturing intervention was not performed, gloves used during manufacture of sterile products were used without adequate assurance of their sterility. The US FDA has asked the company to notify steps taken to correct and prevent recurrence of deviations within 30 days. 

Hospira had entered into an agreement in March 2010 to buy the factory from Orchid Chemicals which makes generic injectable finished dosage.