Mumbai, Sep 28 (IANS): Indian drug major Sun Pharmaceutical's scrip plunged 3.42 percent or 30.50 points on Monday, after the US Food and Drug Administration (FDA) rescinded its earlier approval for a drug launch.
The US FDA revoked an approval issued in March to Sun Pharma's research arm Sun Pharma Advanced Research Company (SPARC) to launch a drug for seizures, citing manufacturing quality problems at its production site.
The US FDA revocation led to the scrip of India's largest drug maker at the Bombay Stock Exchange (BSE) on Monday plunging 3.42 percent or 30.50 points to Rs.860.80 from its previous close of Rs.891.30 per equity share.
The scrip touched a low of Rs.857.50 during the intra-day trade.
The scrip of SPARC too declined in the day's trade. It fell by 2.62 percent or 10.10 points to Rs.375.80 from its previous close of Rs.385.90 per equity share. The scrip touched an intra-day low of Rs.368.50.
The company had said in June that it had been working "very aggressively" to find partners for the new product.
The drug manufacturer had also held "some advanced discussions" and aimed to launch the drug by the second half of fiscal 2016.
According to Angel Broking, the product could have easily garnered $50-80 million in sales and $25-40 million in net profit during the first year of its launch.
"This is a near term setback to the companies plan to launch the product, as we believe that once the facilities are approved, the company will be able to launch the product," said Sarabjit Kour Nangra, vice president research for pharma with Angel Broking.
"However, it is indicative of the fact that the companies Halol facilities will take time to resolve, though company has indicated that it is taking corrective actions for rectifying the same."
Jimeet Modi, chief executive of Samco Securities said that the concerns on the revocation of the approval pertains to Sun Pharma’s Halol facility have been significantly factored in the price correction.
"From a long term investors perspective the ongoing correction in Sun is a great accumulation opportunity. Every dip towards Rs.800 should be looked as a buying opportunity," Modi said.