 "All Ranbaxy drugs made in India banned from US, stock crashes 20%")
Shares of pharma major Ranbaxy Labo today crashed 20 percent in opening trade afterUS drug inspectors have banned the company’s Toansa facility in Punjab from making products for the US market.
At 9:30 am, the stock was down 16.74 percent at Rs 347.30. The stock was the top loser on the 50-share Nifty.
The FDA said Ranbaxy is prohibited from making and distributing pharmaceutical ingredients from its facility in Toansa, India “to prevent substandard quality products from reaching U.S. consumers.”
[caption id=“attachment_1356833” align=“alignleft” width=“380”]  Ranbaxy. Reuters[/caption]
Brokerage Prabhudas Lilladher feels this ban on Toansa unit is a huge negative for Ranbaxy and expects Ranbaxy to report negative EBITDA. “Toansa unit is accounted for 70 percent API for company’s US business. So the prospect is bleak for the company in near to mid-term,” the brokerage house said. Prabhudas said it will buy Ranbaxy in Rs200-250/sh range in long-term while Espirito Santo Securities said it will continue to avoid Ranbaxy until clarity emerges.
The move follows an FDA inspection of the facility which identified significant violations of good manufacturing practices.
Staff at the Toansa facility were found to have retested raw materials and other ingredients after the items failed analytical testing “in order to produce acceptable findings,” and did not report or investigate the failures, the FDA said.
The ban is the latest in a series of measures taken by the FDA to keep substandard products made by Ranbaxy out of the US.market. The FDA previously banned products from the company’s facilities in Paonta Sahib, Dewas and Mohali as part of a consent decree designed to ensure compliance with good manufacturing practices.
The FDA’s latest move means Ranbaxy’s products are all but entirely banned from the United States.
With inputs from Reuters
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