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Zydus Lifesciences Shares Drop 3% as USFDA Issues OAI Status to Facility

19 Jul 2024 , 03:00 PM

On July 19, shares of Zydus Lifesciences experienced a 3% drop following the United States Food and Drug Administration’s (USFDA) designation of its Jarod injectables manufacturing facility as ‘Official Action Indicated’ (OAI). This development came after the US FDA’s inspection of the facility from April 15 to April 23 this year.

During this inspection, the FDA issued ten observations concerning the facility’s compliance. It appears that these observations were not adequately addressed by Zydus Lifesciences, leading to the facility’s OAI classification.

The OAI classification is the most severe of the three possible classifications assigned by the US FDA. It indicates significant compliance issues that could lead to severe consequences for the facility if not rectified. Such consequences may include restrictions on exports, regulatory hurdles, or other administrative actions.

At the time of writing on July 19, 2024 at 2:52 pm shares of Zydus Lifesciences is  currently trading at ₹1144.75 which is a 3.45% dip than the previous close. Zydus Lifesciences stock has gained a total of 88% in the last one year, and witnessed a 63% gain since the beginning of the year.

To regain compliance and clear the OAI status, Zydus Lifesciences must resolve the issues highlighted by the US FDA and undergo a re-inspection of the facility. Only after these steps can the company proceed with launching or filing new drug applications from this facility.

Interestingly, just the previous week, Zydus Lifesciences’ stock reached a 52-week high following the US FDA’s final approval for the marketing of a crucial drug intended for treating chronic heart failure. The drug, Sacubitril and Valsartan tablets, is designed to help reduce the risk of death and hospitalization in patients with chronic heart failure. This medication will be produced at the company’s formulation facility in Moraiya, Ahmedabad. With this approval, Zydus Lifesciences has achieved a total of 399 approvals and has filed over 460 Abbreviated New Drug Applications (ANDAs) since the start of the process in the fiscal year 2004.

Zydus Lifesciences, previously known as Cadila Healthcare Limited, is a major Indian multinational pharmaceutical company headquartered in Ahmedabad. The company focuses on the manufacturing of generic drugs and is listed at 100th position in the Fortune India 500 list as of 2020.

Related Tags

  • USFDA
  • Zydus Lifesciences
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