The company is in the midst of putting together a response to address the said observations, it added.
In the past one-month, the stock declined 11.7% while the benchmark index S&P BSE Sensex remained unchanged. The company’s market capitalisation too declined by Rs 7,426 crore to Rs 57,358 crore, the BSE data showed.
Lupin’s Goa plant is one of its key plants, as it contributes around 20% to the company’s total sales [supplies to key geographies like USA, European Union (EU) and Japan, and contributed close to 40-50% to the US sales.
“Although the USFDA observations seem to be pertaining only to the routine procedures and compliance, any delay in key product approvals, if any, will add to the pressure in the US business. The guidance for key product approval is already delayed, and gSevelamer and gWelchol are now end-FY2018/early-FY2019 opportunities,” analyst at Sharekhan said in recent report.
Lupin is already facing high single digit pricing pressure in the US business on account of increasing competition in Fortamet and gGlumetza, delay in key product approvals and channel consolidation. The recent appreciation of the Indian rupee against the US dollar is likely to add to the company’s problems. Therefore, we feel that Lupin will continue to witness pressure on its US business and margins over the next few quarters, added report.