Edelweiss Securities has given Hold recommendation for Dr Reddy’s Labs with a target price of Rs. 5105 in its research report issued on Dec 03, 2021
Edelweiss Securities’ report on Dr Reddy’s Labs
We analysed the Form 483 with eight observations that Dr. Reddy’s (DRRD) Duvvada FTO-7 and FTO-9 received after USFDA’s October inspection. Takeaways: i) There are no data integrity issues. ii) No repeat observations from Aug-19 inspection. iii) Most observations relate to deficient SOPs, potential microbial contamination and quality control. iv) We classify Observation #3 and #7 w.r.t. equipment qualification process, controls for aseptic filling and inadequate investigation as ‘Serious’ that could potentially lead to Official Action Indicated (OAI) classification resulting in a re-inspection and 9–12 months of remediation timeline.
We maintain the ‘HOLD’ rating with an unchanged TP of INR5,105