Dr Reddy's shares tank 12% after US FDA issues warning letter to AP, Telangana facilities

Shares of pharmaceutical major Dr Reddy’s Laboratories came under severe hammering from investors, tanking nearly 12 percent on the bourses after the company was issued a warning letter by the US FDA a day before with regards to its facilities located at Andhra Pradesh and Telangana.  The company said warning letter by the US drug regulator was issued to its API manufacturing facilities at Srikakulam in Andhra Pradesh and Miryalaguda in Telangana. Besides this, the company also received a warning letter for its oncology formulation manaufacturing unit at Duvvada in Andhra Pradesh. The latest development comes following the earlier the drug regulator’s earlier inspection of these sites in November 2014 and January & February 2015, the release said. In a statement issued to the BSE, Dr Reddy’s CEO, G V Prasad said, “We take quality and compliance matters seriously and stand by our commitment to fully comply with the GMP quality standards across all of our facilities.” “We will respond with a comprehensive plan to address these observations within the stipulated time-frame of 15 days. We will continue to actively engage with the agency to resolve these issues and we have also embarked on an initiative to revamp our quality systems and processes, as an organisation-wide prriority,” the CEO said. At 10.45am, shares of Dr Reddy’s were traded at Rs 3,767.40, down 11.41 percent from previous close, after hitting a low of Rs 3,744, down 12 percent. Over 1.2 lakh shares changed hands on BSE so far.