Mumbai, Sep 17 (DC): The shares of Ranbaxy Laboratories witnessed their worst ever single day fall crashing by over 30 per cent after the US Food and Drug Administration issued an import alert against the company’s Mohali plant, citing lack of good manufacturing practices.

Though the US FDA alert is not expected to a have a near- term financial impact, it is going to significantly slow down the approval for its new product launches planned for the US market.
The import alert by the US FDA comes after the company pleaded guilty and agreed to pay a record $500 million as penalty to settle civil and criminal proceedings initiated against it after the US drug regulator found that Ranbaxy had made serious compromises with the quality of drugs manufactured at its Mohali plant. Interestingly, this is the third Ranbaxy manufacturing plant in India that has come under the scanner of the US drug regulator.

Reacting to the news, shares of the drug major slumped 35 per cent to Rs 297.25 in intra-day trade at the BSE. They finally ended at Rs 318.85, down 30.27 per cent from previous close. The massive sell-off in the stock sent the company’s market value down by Rs 5,855 crore to Rs 13,491 crore.

“The import alert for the Mohali plant is a major negative for the company. The company has had around 18 filings since 2009 from this facility. We believe this would take a very long time, considering the past record of consent decree. We have reduced the number of approvals from the US FDA to two in the current year from 10 previously and from 15 approvals in FY14 to 5 approvals,” commented Rahul Sharma, analyst, Karvy Stock Broking.

“We perceive the import alert as a clear negative as it limits Ranbaxy’s potential for margin expansion from higher asset utilisation,” said Edelweiss Financial Services while revising its rating downwards. The stock closed the day at Rs 318.85, down 30.27 per cent or Rs 138.40.

However, the company informed the stock exchanges that it had not received any communication from the US regulator. “We would like to inform you that the company has so far not received any communication from the US FDA on this subject. We are seeking information from the US FDA in this regard,” the company said.