Sun Pharma declines on buzz Effexor recalled second time in US

Sun Pharmaceutical Industries declined 1.22% to Rs 871.70 at 12:55 IST on BSE on reports company has recalled 68,000 bottles of the antidepressant Effexor in the US in the second recall of the drug this year.

Meanwhile, the S&P BSE Sensex was up 9.47 points or 0.03% at 28,187.35.

On BSE, so far 1.22 lakh shares were traded in the counter as against average daily volume of 2.11 lakh shares in the past one quarter.

The stock hit a high of Rs 896.85 and a low of Rs 871.10 so far during the day. The stock had hit a record high of Rs 932 on 10 November 2014. The stock had hit a 52-week low of Rs 552.50 on 14 March 2014.

The stock had outperformed the market over the past one month till 17 November 2014, rising 10.6% compared with the Sensex's 7.93% rise. The scrip had also outperformed the market in past one quarter, rising 8.4% as against Sensex's 7.95% rise.

The large-cap pharma firm has an equity capital of Rs 207.12 crore. Face value per share is Re 1.

In both cases, the drug was manufactured at the Indian generic drug maker's plant in Halol in the western state of Gujarat and were recalled after they failed to dissolve as they should in quality tests, report said.

The FDA inspected Sun Pharma's plant in September and criticized the company for having “no formalized corrective action plan” to prevent future recalls. Sun Pharma last recalled Effexor in June.

If the FDA isn't satisfied with Sun Pharma's plans to resolve the problems found at the plant, it can issue a warning letter, and later an export ban on the factory, report added.

The development comes as Sun Pharma looks to complete its $3.2 billion acquisition of Ranbaxy Laboratories which has been a poster child for manufacturing problems in India. Ranbaxy has struggled to remove export restrictions on its India facilities, leaving it with only one plant able to manufacture drugs for the lucrative US market. Ranbaxy's inability to solve its quality issues led to its sale by Japanese parent Daiichi Sankyo Co. in April.

Sun Pharmaceutical Industries' consolidated net profit rose 18.4% to Rs 1846.98 crore on 11.8% rise in total income to Rs 4822.15 crore in Q2 September 2014 over Q2 September 2013.