Aurobindo Shares Slump On US FDA Warning For Subsidiary

Shares in Aurobindo Pharma slumped following a warning letter to its subsidiary.

"Further to our letter dated June 4, 2020, we would like to inform that the AuroLife Pharma LLC, a wholly owned stepdown subsidiary of the Company, has received a warning letter from USFDA for its oral solid manufacturing facility situated at Dayton, New Jersey.

This latter follows the earlier letter dated June 4, 2020 issuing a OAI status for this facility. We believe that the existing business from this facility will not be impacted. The Company will be engaging with the regulator and are fully committed in resolving this issue at the earliest," the company said in a notice to the stock exchanges.

When the US FDA finds that a manufacturer has significantly violated FDA regulations, FDA notifies the manufacturer. This notification is often in the form of a Warning Letter. The Warning Letter identifies the violation, such as poor manufacturing practices, problems with claims for what a product can do, or incorrect directions for use. The letter also makes clear that the company must correct the problem and provides directions and a timeframe for the company to inform FDA of its plans for correction.

Shares of Aurobindo Pharma were trading at Rs 776, down nearly 4 per cent in trade.