USFDA classifies Aurobindos facility as VAI; stock rises sharply

On Tuesday, the shares of Aurobindo Pharma surged by more than 15 per cent on BSE in an otherwise weak market after US drug regulator-USFDA classified the company's Unit IV of Hyderabad plant as voluntary action indicated (VAI).

With regard to the inspection of Unit IV, an injectable manufacturing formulation facility of the company, conducted between November 4 and November 13, 2019, the company informed in an exchange filing that United States Food and Drug Administration (USFDA) has determined the inspection classification of this facility as VAI.

The facility remains an integral part of the company, contributing more than 10 per cent to its overall sales and around 20 per cent of its US sales. There were about 46 pending new drug applications (about 30 per cent of 154 pending) and 50 to 60 per cent of pending injectable filings from this facility.

Aurobindo’s decision to call off its deal with Sandoz earlier this month as a result of a delay in approval from US Federal Trade Commission (FTC) is likely to augur well for the company, as many believe that the company would have had to take on debt in the event of the deal happening.

Aurobindo Pharma Limited is a pharmaceutical company engaged in producing oral and injectable generic formulations as well as active pharmaceutical ingredients (APIs).

At 11.30 am on Tuesday, the stock was trading at Rs 632, up by 16.92 per cent or Rs 91.45 per share. The 52-week high is recorded at Rs 838 and the 52-week low is Rs 281.15 on BSE.