Shares of Dr Reddy’s Laboratories trimmed losses and was trading 2% lower after sliding nearly 7% to Rs 3,138, its lowest level since February 11, 2015 on the National Stock Exchange (NSE) in early morning trade.
In the past two weeks, the stock had slipped 26% from Rs 4,253 on November 5, after the company announced that it has received a warning letter from the US Food and Drug Administration ( US FDA) over quality control issues at three of its manufacturing facilities.
Warning letters are issued for violations of regulatory significance and these could lead to enforcement action such as import alerts, if not promptly and adequately corrected in voluntary compliance with the US drug laws by the companies.
Meanwhile, according to media reports, Lundin Law PC said it is investigating claims against Dr. Reddy’s Laboratories concerning possible violations of federal securities laws. The investigation is related to allegations that certain statements issued by Dr. Reddy’s were false and misleading concerning the company’s financial performance.
(CLICK HERE TO READ THE FULL REPORT)
Reacting to certain statements that appeared in the media today relating to its corporate governance practices, Dr Reddy’s spokesperson in a press release said that, “Dr. Reddy’s has always adhered to al disclosure requirements both the Securities and Exchange Commission (SECs) and Indian Stock Exchanges including accounting practices as per the International Financial Reporting Standards (IFRS) and the Indian Accounting Standards.
The company has no further comment on what might be advertorial press releases by law firms and refutes all allegations, it added.
Sarabjit Kour Nangra, VP Research - Pharma, Angel Broking, said ‘currently we don’t think there are any major immediate financial implications of the same and hence, we maintain our numbers and BUY rating with a price target of Rs 3,933.
At 01:05 PM, the stock was down 1.4% at Rs 3,320, recovering nearly 6% from its early morning low on the NSE. The Nifty 50 was up 1.3% or 101 points at 7,833.