Cipla, a leading pharmaceutical company, witnessed a sharp decline in its share prices by over 8 percent following scrutiny from the US health regulator regarding manufacturing irregularities at its Pithampur facility in Madhya Pradesh. The market cap of the company also took a hit, decreasing by a significant margin.
Share Price Drop
The stock of Cipla experienced a substantial decrease, plummeting by 8.10 percent to Rs 1,168.60 on the BSE. Additionally, it reached a low of 8.37 percent at Rs 1,165.10 during the trading day. At the NSE, the decline was recorded at 7.63 percent, with shares trading at Rs 1,174.40.
Market Capitalization Decline
Cipla’s market valuation suffered a substantial setback, witnessing a decline of Rs 8,319.48 crore, bringing it down to Rs 94,344.05 crore. This significant erosion in market capitalization underscores the severity of the situation.
Regulatory Concerns
The US Food and Drug Administration (USFDA) raised concerns about manufacturing practices at Cipla’s Pithampur facility following an inspection conducted from February 6 to 17, 2023. The regulatory body highlighted significant violations of Current Good Manufacturing Practice (CGMP) regulations for pharmaceuticals.
Warning Letter Issuance
In a letter addressed to Cipla’s Managing Director Umang Vohra, the USFDA outlined various violations and discrepancies identified during the inspection. The warning letter emphasized the adulteration of drug products due to non-conformance with CGMP regulations.
Investigation Failures
The USFDA pointed out Cipla’s failure to adequately investigate discrepancies or failures in batches that did not meet specifications, irrespective of whether they had been distributed or not. This lack of thorough investigation raised concerns about product quality and compliance standards.
Despite the challenges posed by regulatory scrutiny, Cipla remains committed to addressing the issues raised by the USFDA and restoring confidence in its manufacturing processes. The company’s response to these concerns will be closely monitored by investors and regulatory authorities alike, as it strives to uphold its reputation and regulatory compliance standards.
