Aurobindo gets 7 FDA observations for Telangana State plant

Hyderabad: City-based drug major Aurobindo Pharma on Monday said it has received seven observations from the US health regulator for its unit-7 in Telangana.

The United States Food and Drug Administration (USFDA) conducted a Current Good Manufacturing Practices (CGMP) inspection at the company's unit-7 manufacturing facility from September 19 to 27, Aurobindo Pharma said in a statement. The inspection ended with seven observations, it added. "We believe none of the observations are related to data integrity. The company is confident of addressing these issues within the stipulated timeline," Aurobindo Pharma said. The company, however, did not provide any details about the observations made by the US regulator.

Recently, markets regulator Securities and Exchange Board of India slapped a penalty of Rs 22.7 crore on promoters of the drug maker for violating insider trading norms.

Sebi's penalty was for alleged insider trading violations by Aurobindo Pharma chairman Ramprasad Reddy, his wife P Suneela Rani, his brother and MD of the company Kambam P Reddy, Trident Chemphar, a company belonging to the promoter group of Aurobindo Pharma, Veritaz Healthcare and Top Class Capital Markets between July 2008 and March 2009 when the company entered into a licensing agreement with US-based Pfizer.

According to Sebi's investigation, Pfizer and Aurobindo Pharma entered into certain licensing and supply agreements on July 22, 2008, November 30, 2008 and December 29, 2008. The press releases for this information were issued by both companies on March 3, 2009.

"The said press releases were followed by an increase in price of the scrip of Aurobindo Pharma. During which the licensing and supply agreements had been entered into but not published or disclosed to the stock exchange between July 22, 2008 and March 3, 2009 is hereinafter referred to as the unpublished price-sensitive information period," Sebi said. The promoters and the above-mentioned individuals were found to have traded in the scrip of Aurobindo Pharma prior to the information about the licensing and supply agreements becoming public through the Press Release dated March 3, 2009, hence violating the Prohibition of Insider Trading norms, the market regulator said.