Lupin stock price rises 10% as Goa plant receives EIR from USFDA

Lupin shares rose nearly 10% in the morning session on December 14 after the firm said it had received an Establishment Inspection Report (EIR) from the US Food and Drug Administration (USFDA) for its Goa manufacturing facility. The facility was inspected in September. According to Lupin’s stock exchange filing, the USFDA found that the facility’s inspection classification was Voluntary Action Indicated.

According to the US Food and Drug Administration, VAI indicates that “objectionable conditions or practices were found, but the agency is not prepared to take or recommend any administrative or regulatory action.”

Also Read| Sensex declines over 350 points while Nifty drops below 17,300 in early trade

“This is a significant milestone as we build back our reputation of being best-in-class in quality and compliance. We are committed to manufacture and supply products of the highest quality from all our manufacturing sites,” CEO Vinita Gupta said. The management did not specify if the EIR indicated that the plant’s warning notice had been withdrawn.

Analysts believe that this resolution will assist Lupin in addressing stagnant US revenues of roughly $170-200 million each quarter. They see FDA investigation of its Goa and Pithampur plants as major risks to the stock’s price.

Also read| China’s AI startup SenseTime postpones IPO after U.S. ban

The Goa and Indore factories supply over half of the company’s pending drug approvals. “The Goa site has a very important place in the US market with the number of affordable, quality medicines we supply, and we now look forward to new products flowing out of the site again,” Lupin Managing Director Nilesh Gupta said.

On the BSE, the stock reached an intraday high of Rs 972.50 and was trading 5.26% higher at Rs 930.60.

Also Read| Digital payments to reach $1 trillion by FY26 in Indian: CLSA

“Resolution of USFDA concerns at its plants (Goa, Pithampur – Unit-II, and Somerset) would be crucial developments to watch out for and, if successfully resolved, would lead to earnings improvements,” BNP Paribas had said in its Q2FY22 post-earnings note.