Alembic Pharma gets USFDA approval for colon cancer injection - shares recover from 52-week low

Last week, the Vadodara-based drugmaker announced that it will be taking an impairment charge of Rs 1,150.43 crore pertaining to its three under-construction manufacturing plants in Gujarat.

The company mentioned that the USFDA approval processes for these manufacturing facilities took longer than anticipated due to Covid-19. It now fears that the cash generation estimates from these manufacturing facilities are likely to have undergone a significant downward revision, due to price erosion in the US generics market as well as rising global interest rates.

In order to capitalise assets at their recoverable value, the management carried out a comprehensive and systematic impairment review of the CWIP pertaining to these manufacturing facilities to arrive at the recoverable value.

Alembic Pharma's impairment is over and above the write-offs of Rs 340 crore so far due to the buyout of its partner stake Aleor Derma in March last year. The total write-offs currently stand at Rs 1,490 crore.

Shares of Alembic Pharma has been one of the top midcap losers of 2023 with the stock falling over 10 percent in last two months. It made a 52-week low of Rs 476.50 on Friday.