Aurobindo Pharma share price rises more than 1% on regulatory clearance of manufacturing facilities

The news of successful Completion of US FDA Inspection at Unit I & III of Aurobindo Pharma Ltd lifted investor sentiment and Aurobindo Pharma share prices gained more than 1% in morning trade on Monday, on a day when the index was trading in the red . .

Aurobindo Pharma in its filing to the exchanges said that the United States Food and Drug Administration (US FDA) has conducted a Pre-Approval Inspection (PAI) at Unit-I & III, Formula manufacturing facility, of APL Healthcare Ltd., a wholly owned subsidiary. of the Company, located in Mahabubnagar District, Telangana, from November 13 to 17, 2023. The audit concluded with zero observations and a “No Action Notified” (NAI) classification.

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Regulatory clearance of manufacturing facilities by the US drug regulator is critical for companies such as Aurobindo Pharma, which rely heavily on exports to the US. US sales contribute more than half of Aurobindo’s total revenue. Aurobindo Pharma’s prospects remain strong in the US markets due to a promising pipeline of injectables and other limited competition products. However, regulatory clearances are important for the continued export of the products to the US.

Analysts maintained a positive view of Aurobindo. Analysts at Axis Securities said in their earnings review that Aurobindo Pharma has several growth levers in place. These are Generic injectable materials, Eugia ($520 Million in sales) that could grow with low double-digit growth based on value-added approval. Trastzumab biosimilar launch in 2FY24E, Pen–G injectable launch in estimated Q1FY25 and a one-off opportunity in generic Revlimid in the next 2-3 years. The company has already launched Revlimid generics.

Others such as Motilal Oswal Financial Services raised their earnings estimates by 6% and 5% for FY24 and FY25 respectively, taking into account: the benefit of reduced price erosion in the underlying portfolio, and improved operating leverage.

Disclaimer: The above opinions and recommendations are the opinions and recommendations of individual analysts or brokerage firms, and not the views of Mint. We encourage investors to check with certified experts before making any investment decision

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Updated: 20 November 2023, 12:14 PM IST

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