land Pharma Stock Recovers After GMP Inspection Update

Gland Pharma's stock witnessed a sharp recovery on December 26, 2024, erasing its initial losses of over 2.40% to trade 0.72% higher at ₹1,792.25 on the NSE by 9:54 AM. The turnaround came amidst updates about a recent Good Manufacturing Practices (GMP) inspection at the Fontenay Manufacturing Facility of Cenexi, a material subsidiary of Gland Pharma.  

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

In its filing to stock exchanges on December 25, 2024, Gland Pharma disclosed that the Agence nationale de sécurité du médicament et des produits de santé (ANSM), France's regulatory authority, conducted a GMP inspection at Cenexi's Fontenay Manufacturing Facility between December 9 and December 19, 2024. The inspection resulted in 10 observations, according to the official notification received on December 24, 2024.  

Gland Pharma emphasized that Cenexi is committed to working closely with the ANSM to address these observations and will provide updates as the situation evolves. Cenexi, acquired by Gland Pharma in January 2023, specializes in sterile and injectable pharmaceutical products, significantly contributing to the company's footprint in Europe.  

Gland Pharma’s Q2 FY25 Performance

Despite its resilience in the stock market, Gland Pharma faced challenges in the second quarter of FY25, with a 15.7% drop in consolidated net profit to ₹164 crore, compared to the same period last year. This decline was largely attributed to lower sales in its Europe business and temporary production issues at Cenexi.  

Revenue from operations showed a modest growth of 2.4% to ₹1,406 crore. Sales from the European market dropped slightly by over 1% year-on-year, underscoring the impact of Cenexi's production challenges. However, excluding Cenexi, the company's revenue grew by 5%.  

The US market, Gland Pharma's largest revenue contributor, saw a 3% increase in sales during the quarter, while other international markets such as Canada, Australia, and New Zealand posted a robust 45% growth. The company remains a leading player in the global generic injectables sector, operating in over 60 countries under a business-to-business (B2B) model.  

Conclusion

Gland Pharma's ability to reverse stock losses highlights investor confidence despite operational challenges. While the recent ANSM inspection at Cenexi’s Fontenay facility raises short-term concerns, the company’s proactive measures to address the observations demonstrate its commitment to compliance and operational excellence. The acquisition of Cenexi has bolstered its presence in Europe, and with continued growth in other markets, Gland Pharma is well-positioned for long-term success in the competitive generic injectables space.