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Wockhardt falls 14 pct on import alert; Macquarie downgrades

Habil Khorakiwala, chairman of Indian generic drugmaker Wockhardt, poses for a picture at the company's head office in Mumbai August 13, 2012. Indian drugmaker Wockhardt is proving there is life after debt restructuring. After defaulting on $110 million in overseas bonds in 2009 and renegotiating payment on 13 billion rupees ($233 million) in loans, the generics maker is nearly free from a sometimes bitter process of debt recast and is enjoying a furious stock rally. Picture taken August 13, 2012. To match interview INDIA-WOCKHARDT/ REUTERS/Danish Siddiqui (INDIA - Tags: BUSINESS)

New Delhi: Wockhardt shares slumped 14 percent intraday on Monday after its third plant got US Food and Drugs Administration (FDA) import alert.

The US regulator has issued import alert on Ankleshwar plant for violating good manufacturing practices.

The inspection by the FDA was conducted in November 2015, after which it issued certain observations (483s).

The import alert possibly implies that the agency is not satisfied with the company’s proposed corrective plan.

Wockhardt’s two major formulation plants in India are already subject to US import bans and most of the company’s US revenues are being serviced by its plant in the US.

Macquarie has downgraded the shares to neutral from outperform and reduced target price to Rs. 1015 versus Rs. 1350 per share.

The Ankleshwar facility receiving under import alert may lead to multiples falling under pressure in the near term, says Macquarie.

The drug major’s Waluj and Chikalthana plants are already under USFDA import alert. (ANI)