Neuland Lab tanks 5% as USFDA issues observations to Hyderabad facility

NEW DELHI: Shares of Neuland Laboratories tanked over 5 per cent in Monday’s trade after the drugmaker that the USFDA has issued two observations, under form 483, to its manufacturing facility (unit 1) at Bonthapally, Hyderabad after inspecting it during April 3-7.

In a filing to BSE, the company said, “At the end of the inspection, there were two observations given under form 483. The two observations relate to a) procedures followed for the annual quality standards record evaluation and b) cleaning and maintenance of equipment at appropriate intervals during manufacturing campaign.”

The company said that it has initiated corrective and preventive actions for the observations and is confident of satisfying the FDA within the stipulated time.

Following the announcement, shares of the company that has a market capitalisation of just over Rs 1,300 crore tumbled 5.2 per cent to hit a low of Rs 1446.50 on BSE. The stock has remained in a wide range of Rs 678-1,680 in the past one year.

At the prevailing price, the stock is trading at 44 times its trailing 12-month earnings per share (EPS).