Cipla shares fall over 3% after USFDA discloses observations on key partner

Shares of Cipla Ltd

. are trading about 2% lower on Wednesday, January 7, after the US Food and Drug Administration (FDA) released details of its observations on Pharmathen International.

Cipla has a partnership with Pharmathen, a Greece-based contract manufacturing organisation, to commercialise tumour drug Lanreotide in the US market, and the regulatory action has weighed on investor sentiment.

According to the US FDA, the observations point to multiple compliance gaps at Pharmathen's facilities.

These include inadequate procedures to prevent contamination and weak control systems to ensure sterile conditions. The regulator also flagged deficiencies in aseptic processing areas and shortcomings in laboratory controls, including the absence of appropriate procedures.

The FDA further said failures in establishing adequate processes to ensure the purity and quality of drug products, along with lapses in following approved sampling plans and testing procedures.

In addition, the buildings used for manufacturing were found to be in poor condition.

This is a developing story. More details awaited.