Dr Reddy’s Laboratories encountered a significant downturn in its share value, witnessing a nearly 7 percent drop in early trade on December 11. The cause behind this decline lies in the observations made by the US Food and Drug Administration (FDA) regarding the company’s unit located in Telangana. Several of these observations are deemed “severe,” according to insights from Antique Broking, raising concerns about the issuance of a potential warning letter by the US drug regulatory body.
The impacted unit holds strategic importance for the company’s exports to the United States, and shipments to this region constitute a substantial portion of the company’s overall revenue. The observations from the FDA pointed out issues related to microbial contamination, the overall condition of the manufacturing unit, challenges with data integrity, and market complaints, all of which were characterized as serious concerns.
By 12:16 pm, Dr Reddy’s Laboratories’ shares were trading 5.45% lower, settling at ₹5,449.90.
