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Ranbaxy stock nosedives 20% on USFDA restrictions

Source: PTI
January 24, 2014 12:50 IST
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Shares of Ranbaxy Laboratories on Friday slumped as much as 20 per cent in the morning trade after the USFDA prohibited the company from producing and distributing drugs for the American market from its Toansa plant in Punjab.

After a weak opening, shares of the drug firm further tumbled 19.69 per cent to Rs 335 on the BSE.

On the NSE, the stock dived 19.75 per cent to Rs 335. The company's market value tanked by Rs 3,156 crore to Rs 14,520 crore.

"With this import alert, the operations of the company in US business which contributes 40 per cent could come under impact, unless it can compensate for the same at the earliest and mange a smooth supply of key raw material," said Sarabjit Kour Nangra, VP-Research, Pharma, Angel Broking.

"Subsequent to the Form 483 issued in early January 2014, Ranbaxy voluntarily and proactively suspended shipments of API from this facility to the US market when it received the inspection findings," the company said.

The company is disappointed with the recent US Food and Drug Administration (USFDA) action and would like to apologise to all its stakeholders for the inconvenience caused by the suspension of shipment, Ranbaxy Laboratories said in a statement.

"This development is clearly unacceptable and an appropriate management action will be taken upon completion of the internal investigation," Ranbaxy CEO and Managing Director Arun Sawhney said. 

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