Mumbai: The US Food and Drug Administration has reopened its investigation of Aurobindo Pharma’s Unit-4 manufacturing facility, days after the regulator had announced that it had recommended voluntary action by the company to follow good manufacturing practices.
Aurobindo in a statement to the stock exchanges on Friday said it has received a communication from USFDA that the inspection completed by the regulator from November 4 to 13, 2019, is still open and under review by way of “rescindment of 90-day voluntary action indicated (VAI) letter that was issued to the company on February 18, 2020”.
The revocation of VAI seems almost like a warning letter, said Surjit Pal an analyst from brokerage firm Prabhudas Lilladher (PL).
This means the USFDA is unlikely to give approvals to pending ANDAs (abbreviated new drug applications), or applications for generic drug licences in the US, from the injectable plant in Hyderabad without resolution to the investigation, he said.
PL estimates that 46 out of 66 pending drug filings of Aurobindo Pharma are injectables. Possibility of further delay of pending approvals from the Unit-4 facility will weigh on the drug maker’s valuation, Pal said.
ICICI Securities had last week had revised its rating on Aurobindo to “buy” after the company announced that USFDA had issued establishment inspection report (EIR) to the injectable manufacturing facility and it was also been classified as ‘voluntary action indicated’.
“This is a highly positive development which would help rerating of valuations, since it is an important plant with more than 40 injectable ANDAs pending for approval,” the brokerage had noted.