Alkem Laboratories' Shares Drop 3% After FDA Issues Observations

9 Apr 2024 , 03:29 PM

Alkem Laboratories witnessed a 3% decline in its shares during early trading on March 28 following the issuance of a Form 483 with 10 observations by the US Food and Drug Administration (FDA) for its Himachal Pradesh manufacturing facility.

The FDA inspected the company's manufacturing site in Baddi from March 19 to 27, resulting in observations related to good manufacturing practice (GMP) and pre-approval.

Alkem Laboratories clarified that the inspection did not reveal any data integrity issues and was conducted as part of routine business operations.

"This was a GMP as well as a pre-approval inspection. There is no data integrity observation. This Inspection is part of the routine business operations and the Company shall submit to US FDA within the stipulated timeline, a detailed response to close out the said observations," Alkem Labs said in a statement on Wednesday.

Currently, the company's shares are trading at ₹4,983.95 on the NSE, reflecting a 0.41% decrease from the previous session's closing price.

Form 483 is issued by the USFDA at the end of an inspection when conditions potentially violating the Food Drug and Cosmetic (FD&C) Act and related Acts are observed.

In February, Alkem Laboratories refuted allegations of tax evasion, responding to reports suggesting excessive deductions made for its manufacturing units in Sikkim, which allegedly exceeded ₹1,000 Crore.

Sources within the company stated that numerous deductions were claimed under various special sections such as 80-IC. Despite recent setbacks, the stock has shown resilience, gaining 40% in the past six months compared to a 13% rise in the benchmark Nifty50.

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