Biocon sheds 4%, hits 52-week low as US FDA issues 483 for 3 sites

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Shares of Biocon hit a 52-week low of 298.50 rupees as they slid 3.6% on BSE in Thursday’s intraday trading after the US health regulator issued Form 483 to the company with 11 observations each for its two sites in Bengaluru and six for a factory in Malaysia.

The stock was trading at its lowest level since April 2020. At 09:30; Biocon was trading 2% lower at Rs 303 against a 1.2% drop in the benchmark Sensex. Over the past three months, it has underperformed the market falling 10% against a 5% rally in the Sensex.

According to the United States Food and Drug Administration (USFDA), Form 483 is issued at the end of an inspection if an investigator has observed conditions that may constitute violations of the Food Drug and Cosmetic (FD&C) Act and related laws.

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The United States Food and Drug Administration (US-FDA) conducted three on-site inspections at the seven manufacturing facilities of Biocon Biologics (subsidiary of the company), spread over two sites in Bangalore, India, and one in Johor , in Malaysia. These inspections began with the Bengaluru site on August 11, 2022 and ended with the Malaysia site on August 30, 2022.

These inspections were initiated due to three pre-approval inspections for the biosimilar Bevacizumab, rh insulin and insulin aspart and one capacity expansion inspection for the biosimilar Trastuzumab. These included multiple drug substance and drug product facilities and other supporting infrastructure at these sites.

Biocon said the company does not expect the outcome of these inspections to impact the current supply of its products.

Observations primarily relate to the need for improved microbial control strategies, improved quality monitoring, increased use of software applications and computer-based tools to facilitate risk assessment and investigation, and further upgrades to procedures and facilities, the company said.

“We will submit Corrective and Preventive Action Plans (CAPAs) to the US FDA within the required time frame,” Biocon said.

Biocon’s launches of bBevacizumab, bAspart and bAdalimumab, particularly in the US, are expected to contribute to the company’s near-term growth. With two strategic agreements signed with Serum and Viatris, Biocon is targeting revenues of $1.8 billion in FY24.

“We believe that timely regulatory clearance and subsequent launch timing, including for the planned FY23 launches of bAspart (CRL in September 2021) and bBevacizumab remain key near-term triggers for the company.” , ICICI Securities said in a note.

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