Mumbai: The shares of Ipca Laboratories slumped over 14 percent as Switzerland-based Global Fund, which financially supports various disease eradication programmes, decided it will not source its malaria drug, the company notified the BSE.
Earlier in the day, the company's stock plunged 14 percent to Rs 480, its 52-week low on the BSE and on the National Stock Exchange (NSE), it tanked 14.29 percent to hit its one-year low of Rs 478.60.
However, 1328 hours, the company's stock had recovered slightly from its day's low but was still significantly down from the previous day's close. The stock was down 10.87 percent or Rs 60.70 lower at Rs 497.85.
Citing reasons for its decision, Global Fund, in an email to Ipca said that the company was going to refrain from sourcing the malaria drug from it in as it had received a warning letter from the US drug regulator.
Global Fund's letter to Ipca
In a notification to the BSE, Ipca revealed Global Fund's statement: "In the light of the warning letter issued to the Company by the United States Federal Drug Regulatory Authority (US FDA) on January 29, 2016, they have re-assessed the situation and following a risk consideration exercise, will not allocate any volume of Artemisinin-based Combination Therapy (ACTs) to the Company and that they will only source ACTs from other pre-qualified suppliers that have no outstanding issues with the regulators."
In a regulatory filing, Ipca Laboratories said the Geneva-based organisation that provides financial aid against AIDS, tuberculosis and malaria, had informed the company of its decision on Wednesday via a letter.