ƹٷapp Broker's call: Aurobindo Pharma (Hold) - The Hindu BusinessLine




          | Updated on January 30, 2020 Published on January 31, 2020

          Emkay Global

          Aurobindo Pharma (Hold)

          CMP: ₹479

          Target: ₹500

          The USFDA has classified Aurobindo Pharma’ Unit — VII plant as OAI (official action indicated) for the inspection held in October 2019. Unit — VII is an oral solids facility and contributes about 20 per cent of its US sales.

          This facility has around 169 filings, of which around 151 ANDAs are approved (including 14 tentative approvals). Around 18 filings are pending for approval, which we believe were due for approval in the next 1-1.5 years and will be impacted due to the OAI status. Of these, around 7-8 had APIs linked to Unit-XI, which is already under warning letter.

          We had previously highlighted the increased USFDA scrutiny on ARBP; over the last 9M — Unit XI has been issued a warning letter while Unit I, Unit IX, and Unit VII have been classified official action indicated (OAI). Further, Unit IV (fourteen observations) and Unit VIII (four observations; 90-days for mandatory classification get over in mid-Feb) are yet to be classified and will be closely watched out for.

          We currently have a Hold rating on the stock. Target price: ₹500. Aurobindo Pharma is an ‘Underweight’ in EAP.

          Published on January 31, 2020

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