Dr Reddy`s continues to see huge selling, down over 5%

Mumbai: Shares of Dr Reddy's Lab continued to face selling pressure for a third straight session Tuesday on receiving a warning letter from the US drug regulator over quality issues at its two API manufacturing plants and a formulation unit in Andhra Pradesh and Telangana.

The stock slipped 5.13 percent to Rs 3,324.70 on BSE.

At NSE, shares of the company dropped by 5 percent to Rs 3,323.50.

The stock has fallen by over 20 percent in three days.

Dr Reddy's Laboratories had yesterday said the US Food and Drug Administration has directed it to get a third party assessment of its three manufacturing plants for which it received warning letter last week.

Dr Reddy's CEO G V Prasad also said the company is in the process of shifting some of the products to other plants in the wake of warning letters.

"We have instituted corrective actions to assess the 483 observations received earlier for these sites. The recent letter underscores the need for us to reevaluate the work done in the light of the observations (made by the FDA) and continue to implement the process ...

"The FDA wants us to focus on the issue (on the warning letter) and also get the third party verification and third party evaluation for certain things and also do it across our manufacturing network," Prasad said in conference call.

The country's second largest drug maker last week said it received a warning letter from the US drug regulator relating to two of its Active Pharma Ingredients (API) manufacturing plants and a Formulation plant located in Andhra Pradesh and Telangana.