Granules India Receives USFDA Warning Letter for Gagillapur Facility

Granules India announced on Thursday (February 27) that the United States Food and Drug Administration (US FDA) has issued a Warning Letter for its Gagillapur facility following an inspection conducted in August 2024.

The company stated in a regulatory filing that the classification of “Official Action Indicated” (OAI) remains, but the regulator has not signalled any further escalation.

Granules to Respond and Seek Meeting with US FDA

In response to the Warning Letter, Granules India affirmed its commitment to addressing the regulatory concerns and ensuring compliance. The company plans to submit a response within the stipulated time frame and will seek a meeting with the US FDA to demonstrate its ongoing compliance efforts.

“We will respond within the stipulated time frame and seek a meeting with the FDA to demonstrate ongoing progress towards compliance. We remain confident that this matter will be resolved satisfactorily within a reasonable timeframe,” Granules India said.

OAI Classification and Previous Observations

In December 2024, Granules India informed stakeholders that the US FDA had classified its Gagillapur facility in Telangana as “Official Action Indicated” (OAI). This followed a Form 483 issued by the US FDA in September 2024, which outlined six observations regarding the facility.

Impact on Product Submissions and Existing Operations

The Warning Letter may temporarily impact the review of pending product submissions from the Gagillapur facility. However, Granules India confirmed that the manufacturing and distribution of existing products from the site remain unaffected.

Remediation Measures Implemented by Granules India

Following the FDA audit and the six Form 483 observations, Granules India implemented a comprehensive remediation plan. The company voluntarily paused manufacturing and dispatches in September 2024 to conduct a thorough risk assessment, ensuring no product contamination or safety concerns before resuming operations.

Key remediation efforts include:

• Corrective and Preventive Actions (CAPAs)
• Oversight by three independent consulting firms
• Continuous product testing
• Monthly updates to the FDA

The Warning Letter highlights four key areas previously outlined in the Form 483 observations. Granules India stated that significant progress has been made in addressing these concerns, with most corrective actions completed and the remaining ones progressing as scheduled.

“Granules has been providing regular updates to the FDA on the progress and effectiveness of these remediation measures through monthly updates. A key focus of these efforts remains risk mitigation, ensuring that there is no adverse impact on the safety or quality of products manufactured and distributed from the Gagillapur facility,” the company stated.

Future Outlook and Expansion Plans

Despite the regulatory challenges at Gagillapur, Granules India remains optimistic about its long-term growth prospects. The company is focusing on multiple strategic initiatives, including:

• New product launches from its Granules Pharmaceuticals Inc. (GPI) facility in the US
• Capacity expansion at Genome Valley
• Increased production in Europe
• Expansion of its oncology pipeline from Unit V

Granules India reiterated its commitment to compliance and regulatory excellence, ensuring that necessary measures are in place to address the US FDA’s concerns while maintaining its growth trajectory.

Stock Performance 

On February 27, 2025, Granules India share price ended 1.18% lower at ₹507.70. Granules India’s share price reached a 52-week high of ₹724.55, and a 52-week low of ₹382.05. As per BSE, the total traded volume for the stock stood at 0.21 lakh shares with a turnover of ₹1.05 crore.

At the current price, Granules India shares are trading at a price-to-earnings (P/E) ratio of 38.17x, based on its trailing 12-month earnings per share (EPS) of ₹13.30, and a price-to-book (P/B) ratio of 3.83, according to exchange data.

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