A third Ranbaxy Laboratories Ltd plant in India has been sanctioned with an import alert ban from the US Food and Drug Administration, triggering the worst single day fall in its shares on Monday and a brokerage downgrade.
The FDA slapped the alert on Ranbaxy Laboratories' Mohali factory in northern India on Friday, saying the plant owned by India's biggest drugmaker by sales had not met so-called good manufacturing practices, the U.S. regulator said on its website.
A Ranbaxy Laboratories spokesman did not have immediate comment on the FDA action.
India is the biggest overseas source of drugs to the U.S. and is home to over 150 FDA-approved plants including facilities run by global players. Pharmaceutical exports from India to the U.S. rose nearly 32 percent last year to $4.23 billion.
The latest ban on company, controlled by Japan's Daiichi Sankyo Co, comes just a few months after Ranbaxy Laboratories pleaded guilty to U.S. felony charges related to drug safety and agreed to a record $500 million in fines.
Two of the Ranbaxy Laboratories' other plants at Dewas and Paonta Sahib were hit with the same alerts in 2008, and are still barred from making shipments to the United States. The company has a total of eight plant locations across India.
Shares in Ranbaxy Laboratories plummeted on Monday, sinking as much as 32.6 percent to post their worst single day fall. The stock was trading down 27 percent at 333.45 rupees at 0607 GMT in the main Mumbai market that was up 0.9 percent.
Brokerage HSBC said in a research note on Monday it was downgrading Ranbaxy Laboratories to "underweight" from "overweight" due to the FDA import alert for its Mohali plant.
HSBC said Ranbaxy had started shipping generic Lipitor, the widely used cholesterol lowering medicine, from its Mohali plant in April last year but six months later it recalled some of the batches due to the potential presence of glass particles.
After this Ranbaxy Laboratories had to stop exporting Lipitor from its Mohali plant, the brokerage said.
"Given there are no sales from Mohali, the import alert has no financial impact ... However, hopes for approvals for new products from Mohali have been dashed. We understand Ranbaxy Laboratories had been working with the USFDA on approval of Diovan from Mohali."
The company has been awaiting