Ranitidine overhang haunts SMS Lifesciences, stock plummets

SMS Lifesciences, one of the major manufacturers of Ranitidine API in the world, has to face the brunt of USFDA decision on Ranitidine products.The company said that it expects a temporary slow-down in sales of Ranitidine, which accounts for major share in company’s total revenue.

On Thursday, SMS Lifesciences informed the bourses that it has done preliminary analysis of its Ranitidine product and processes and found that the NDMA impurity is in trace levels, in many cases lower than the levels found in commonly consumed food, milk, meat etc.

The regulatory, Central Drugs Standard Control Organization (CDSCO) is yet to establish acceptable limits for NDMA (N-Nitrosodimethylamine) impurity in Ranitidine.

On September 13, the USFDA announced that it found the presence of NDMA (N-Nitrosodimethylamine), a carcinogenic impurity, at low levels in some Ranitidine API products. USFDA is evaluating the presence of this impurity and the impact (if any) of this impurity on patients. This development has affected most of the pharma stocks in India as well as world as the pharma companies are expected to see temporary slowdown in sales of Ranitidinie tablets.

In the last one month, the stock of SMS Lifesciences has tanked more than 53 per cent from September’s high of Rs. 554.25. In Friday’s trading session also, the stock has plummeted nearly 10 per cent to touch intra-day low of Rs. 257.50 apiece, while the benchmark indices are trading in green.