GSK stock falls following Ranitidine ban

14 Jul 2020 2:00 PM
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As many as 1,882 shares in GSK were traded at the DSE

Stock price in GlaxoSmithKline (GSK) Bangladesh Ltd declined by Tk18.2, or 1.06% at Dhaka Stock Exchange (DSE) after the Drug Administration banned Ranitidine tablets, a heartburn drug the raw materials of which are imported from India.

On Sunday, Directorate General of Drug Administration temporarily banned marketing and sales of Ranitidine tablet imported from two Indian pharmaceuticals — Saraca Laboratories Ltd and Dr Reddy's Laboratories. 

The Drug Administration also banned the production and marketing of Ranitidine tablets, mostly used to treat ulcers of stomach, using the raw materials from these two drug makers, Director General of the Drug Administration Md Mahbubur Rahman told media. 

The ban decision came after an alleged detection of genotoxic nitrosamine NDMA, a cancer causing impurity, in the tablet.

Soon after the banning news hit a number of online news outlets, share prices of GSK started falling. 

On Sunday, share price of GSK fell from Tk1711.7 to Tk1670.8 at the DSE. The stock fell by 1.06% or Tk18.2. 

GSK is a UK-based pharmaceutical giant. 

As many as 1,882 shares in GSK were traded at the DSE. The market value of the traded shares was Tk31 lakh. 

GSK Bangladesh Head of Communications Rumana Ahmed told Dhaka Tribune: "GSK has already decided to suspend the release, distribution and supply of all dose forms of Zantac products to all markets as a precautionary action pending the outcome of the ongoing tests and investigations."

India recalled Ranitidine tablets from the market following an alleged detection of genotoxic nitrosamine NDMA by global and Indian regulatory authorities.

Canada and France have already announced Zantac recalls. The US and the European Union are investigating it.

Director General of the Drug Administration Md Mahbubur Rahman said they sat with pharmaceutical industry leaders and analyzed the issue before taking the decision.

“It’s a temporary ban because the US FDA (The Food and Drug Administration) didn’t ban it, nor did it recommend banning. It was a voluntary recall by the company. We banned the import out of concern,” Rahman said, adding that they would continue monitoring the situation.

According to the DSE data, sponsor-directors hold 81.98% of GSK’s share, institutions 15.85%, foreign investors 0.36% and general investors hold 1.81%.