Aurobindo Pharma shares slip 3% as companys US arm recalls different drugs due to manufacturing lapses
The stock came under pressure after reports said that Aurobindo Pharma, along with Alembic Pharmaceuticals, is recalling different products in the US market due to manufacturing lapses.
Shares of Aurobindo Pharma slipped as much as 3.02 per cent to hit a low of Rs 828.05 apiece on the BSE on Tuesday (August 22). The stock came under pressure after reports said that Aurobindo Pharma, along with Alembic Pharmaceuticals, is recalling different products in the US market due to manufacturing lapses.
As per the US Food and Drug Administration's (USFDA) latest enforcement report, the US-based subsidiary of Alembic Pharmaceuticals is recalling 82,400 bottles of Tobramycin Ophthalmic Solution in the American market. Besides, the US-based arm of Aurobindo Pharma is also recalling 48 bottles of Rufinamide Tablets, (200 mg, packaged in a 120-count bottle), due to cGMP (current good manufacturing practise) deviations, the USFDA said. The batch was released prior to approval, the report added.
Post-development, global brokerage Citi has downgraded the stock to 'Sell' from 'Buy'. The target price has been raised to Rs 750 from Rs 660 earlier. The brokerage, in its note, said that improved market conditions in the US generic market may not sustain and that there is limited visibility on the generic pipeline. Citi further said that the upside from biosimilars is some time away and that near-term upside levers for the stock are priced in.
Aurobindo Pharma Q1 Results
Aurobindo Pharma said its consolidated net profit increased 10 per cent to Rs 571 crore in the first quarter ended June 30, 2023, on account of robust sales across regions. The drug firm reported a net profit of Rs 520.5 crore in April-June 2022-23. Revenue from operations rose to Rs 6,850.5 crore from Rs 6,236 crore in the year-ago period, the Hyderabad-based firm said in a statement.
With the product pipeline continuing to advance, and execution of growth drivers proceeding as planned, the company is confident that its fundamental strengths position it to create an upward trajectory, Vice-Chairman and Managing Director K Nithyananda Reddy said. "Looking ahead, we are confident in executing our growth initiatives and creating long-term value for our shareholders," Reddy said.
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