Shares of Dr Reddy’s Laboratories Plummeted 7% on 11 December after the USFDA (US Food and Drug Administration) issued three observations for its unit in Telangana.

The US regulator had conducted an inspection at the Bachupally unit between 19 October and 27 October, after which it had issued Form 483.

The observations received range from unclean equipment and utensils to issues related to microbial contamination and the state of the manufacturing unit, to failure to explain any unexplained discrepancy, and problems with data integrity and market complaints.

This manufacturing unit is vital to the company’s exports to the US and shipments to that country, contributing 30% to its overall revenue. The unit also manufactures more than 100 products for the company, including its top 10 products, the generics of Nexium, Toprol, Ciprodex, Valcyte, and some partnered products as well.

In a separate filing, the company also announced that its Board of Directors have also approved the allotment of 9,181 equity shares with a face value of Rs 5 on 9 December to employees pursuant to the exercise of their Stock Options.

At 2:34 pm, the shares of Dr Reddy’s Laboratories were trading 5.25% lower at Rs 5,461.15 on NSE.