Ranbaxy recovers from fall; suspends shipments from two plants

NEW DELHI: Ranbaxy Laboratories bounced back sharply in mid-morning trade on Tuesday after falling over 2 per cent as the drug maker said it has suspended shipments of pharmaceutical ingredients produced at its Toansa and Dewas plants.

Reacting to the news, shares of the drug maker plunged as much as 2.3 per cent in trade on the Bombay Stock Exchange, but recouped early morning losses quickly.

At 09:50 a.m.; Ranbaxy was trading 0.8 per cent higher at Rs 366.55. It hit a low of Rs 354.85 and a high of Rs 368.90.

"This voluntary decision was taken as a precautionary measure and out of abundant caution to better allow the company to assess and review the processes and controls. The company will resume shipments after reassuring them about the processes and controls at these facilities," Ranbaxy said in an exchange filing.

Earlier in the month of January, the US Food and Drug Administration banned the Toansa plant, a key supplier of ingredients to the generic drugmaker's US factory, from sending its products to the United States due to manufacturing violations, Reuters reported.

According to analysts, the import alert on Toansa plant is very critical as they were sourcing one-fourth of their US generic sales from that particular facility. Toansa is based in Punjab, India, and the facility produces a substantial portion of its API (30 per cent of US generic sales).