USFDA adverse observations on subsidiary may have an impact over 1 year: Aurobindo Pharma

27 May 2024 , 05:04 PM

Aurobindo Pharma Ltd expects the impact of adverse observations issued by USFDA on the facility of its subsidiary Eugia Steriles to have an impact over 1 year. These observations were issued by USFDA post its inspection of the facility in April this year.

In a conference call with investors, the pharmaceutical business said it has established the Vizag factory to offset the impact on Eugia Steriles facility.

According to the pharma company, the Eugia III unit has an influence on its specialty and injectable businesses.

Following an inspection of the Eugia Sterile facility, the US drug authority filed Form 483 in April with three serious observations. The USFDA team discovered flaws in the plant’s operations, raising worries about the effectiveness of measures for preventing microbial contamination of pharmaceutical products.

Eugia Pharma Specialities Ltd, Aurobindo Pharma’s step-down subsidiary, controls the plant’s operations.

The company also informed analysts that it expects a margin of 21-22% in the current fiscal year. The company recorded an EBITDA margin of 20.1% for fiscal year 2023-24, up from 15.1% the previous year.

Aurobindo Pharma reported a 17.1% increase in revenue from operations to ₹7,580 Crore in the March quarter, up from ₹6,473 Crore the previous year.

According to a business announcement, net profit increased by 79% to ₹909 Crore in the fourth quarter of FY24, from ₹506 Crore in the same period in FY23.

The pharmaceutical company informed the stock exchanges that the API business was boosted by higher capacity utilisation in the fourth quarter of FY24. The Active Pharmaceutical Ingredients (API) business revenue remained constant at ₹1,019 Crore compared to the previous year, accounting for 13.4% of consolidated revenue. US formulations revenue grew by 21.6% year on year to ₹3,588 Crore, accounting for 47.3% of total revenue.

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