Cipla shares surge nearly 10% after positive USFDA update on Goa facility

Cipla Ltd's shares skyrocketed by 9.88% today, reaching an intraday high of ₹1,557.45 on the Bombay Stock Exchange (BSE). As of 10:41 AM, the stock was up 8.24% at ₹1,534.25, buoyed by a significant announcement regarding its Goa manufacturing facility.

The surge follows the US Food and Drug Administration (USFDA) granting Cipla's Goa facility a "Voluntary Action Indicated (VAI)" status after a routine cGMP inspection conducted between June 10 and June 21, 2024. This classification indicates that while some observations were made, they do not require immediate corrective actions, which alleviates concerns about regulatory hurdles that could impact operations or delay new drug approvals in the U.S.

The VAI status is particularly advantageous for Cipla as it paves the way for important product launches, notably the generic version of Abraxane, a widely used chemotherapy drug. A successful introduction of this generic could substantially enhance Cipla's revenue and market presence in the oncology segment.

With this regulatory clearance, Cipla expands its potential in the U.S. market, allowing for a steady flow of new product approvals and a diversified portfolio of high-margin drugs. The market has reacted positively, viewing the VAI status as a sign of regulatory confidence, further reflected in the stock’s sharp rise today.

Cipla's shares have risen 28.26% over the past year, though they have experienced some volatility in recent months, including a 7% decline in the last month. Currently, the stock is trading above its 5-day, 10-day, 150-day, and 200-day simple moving averages, though it remains below the 20-day, 30-day, 50-day, and 100-day SMAs, with a 14-day relative strength index (RSI) of 45.75.