USFDA asks Dr Reddy’s to sort out issues at its Hyderabad facility

Drug major Dr Reddy’s Laboratories Ltd on Tuesday (February 25) said the United States Food and Drug Administration (USFDA) found some issues at its active pharmaceutical ingredient (API) manufacturing facility (CTO-2) in Bollaram, Hyderabad, and asked it to sort them out. “Further to our intimation dated November 19, 2024, on the inspection conducted by the United States Food & Drug Administration (USFDA) at our API manufacturing facility (CTO-2) in Bollaram, Hyderabad, we wish to inform you that the Company has received the Establishment Inspection Report

(EIR),” Dr Reddy’s Laboratories said in a regulatory filing.

The US FDA has classified the inspection as Voluntary Action Indicated (VAI) and has marked the inspection as “closed”. A VAI classification from the USFDA means an inspection identified certain issues; however, the FDA will not take immediate action. Instead, the facility is allowed to address and rectify these issues voluntarily.

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Dr Reddy’s Laboratories reported a 2.5% year-on-year (YoY) increase in net profit at ₹1,413.3 crore for the third quarter that ended on December 31, 2024, missing estimates. In the corresponding quarter of the previous fiscal, Dr Reddy’s Laboratories posted a net profit of ₹1,379 crore. The CNBC-TV18 poll had predicted a profit of ₹1,501.4 crore for the quarter under review.The company’s revenue from operations increased 15.9% to ₹8,358.6 crore against ₹7,215 crore in the year-ago period. The CNBC-TV18 poll had predicted revenue of ₹8,347.85 crore for the quarter under review.

At the operating level, EBITDA was up 8.9% to ₹2,298.2 crore in the third quarter of this fiscal over ₹2,111 crore in Q3 FY24. The CNBC-TV18 poll had predicted an EBITDA of ₹2,343.67 crore for the quarter under review.

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Shares of Dr Reddy’s Laboratories Ltd ended at ₹1,126.55, down by ₹38.20, or 3.28% on the BSE.