Cipla shares tank after US regulator flags lapses at drug maker's Pitampur unit

Cipla shares suffered steep losses on Monday after the drug maker said US health regulator had issued eight observations on its manufacturing facility in Pitampur, Madhya Pradesh. The Cipla stock fell by as much as Rs 69.6 or 6.8 per cent to Rs 956.2 apiece on BSE. 

The US Food and Drug Administration (FDA) conducted a current good manufacturing practices (cGMP) inspection at the Cipla manufacturing facility from February 6 to 17, according to a statement by the Mumbai-based pharmaceuticals firm.

Cipla said it received the eight observations in Form 483. 

The US drug regulator uses Form 483 to communicate any detected violations upon completion of an inspection.

Cipla said it will work closely with the US FDA and is committed to addressing these observations comprehensively within stipulated time.

What brokerages recommend on Cipla shares after US FDA observations 

JPMorgan pointed out that the Pitampur unit is one of the company's key manufacturing facilities besides Goa and the Invagen plant in US.  

Cipla manufactures respitatory products such as proventill brovana and pulmicrot from the Pitampur plant in MP, Macquarie highlighted.  

Both the brokerages still see up to 20 per cent upside in Cipla shares from their closing price on Friday. 

Cipla shares have lost 8.7 per cent of their value in the past one month, a period in which the Nifty50 benchmark has declined 0.4 per cent.

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