US Law Firm Probes Dr. Reddy’s and PTC
US law firm Zeldes Haeggquist & Eck has started investigating a possible violation of federal securities laws by Indian generics manufacturer Dr. Reddy’s Laboratories and US biopharmaceutical company PTC Therapeutics.
The possible violations come under the Securities Exchange Act of 1934 and relate to shareholders who have suffered losses on their investments.
Dr. Reddy’s received a warning letter in November 2015 from the director of the US Food and Drug Administration’s (FDA) Center for Drug Evaluation and Research in relation to inadequate quality controls at three key Indian facilities that manufacture raw pharmaceutical materials and oncology medicines.
The FDA said Dr. Reddy’s may not receive US approvals for any new applications or supplements that list the company as a manufacturer of drugs or active pharmaceutical ingredients (APIs). The agency added that it may refuse admission into the US of drugs manufactured at the three facilities until the problems were fixed.
Over the three days following this news, the value of Dr. Reddy’s stock dropped by 25%.
New Jersey-based PTC Therapeutics, which focuses on developing and commercializing treatments for rare diseases, received a Refuse to File letter from the FDA on Feb. 23 this year regarding a New Drug Application (NDA) for Translarna. The drug is a protein restoration therapy designed to treat Duchenne muscular dystrophy.
The FDA said the application was not sufficiently complete to permit a substantive review. The letter prompted PTC’s stock to fall by more than 55% on intraday trading.
