Drug maker Zydus Lifesciences Ltd announced that a US Food and Drug Administration (USFDA) inspection of its manufacturing plant at Moraiya in Ahmedabad concluded with five observations. According to a stock exchange filing, the inspection was conducted from October 5 to October 13, 2026. The company stated it will work closely with the USFDA to address these observations expeditiously. While the company has not disclosed the specific nature of the observations, it is common in such processes for areas of improvement to be identified relating to documentation, quality control procedures, or other operational aspects. As reported by Business Upturn, this inspection report will be treated as a key disclosure under Regulation 30 of the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements Regulations, 2015, mandating listed companies to keep investors informed about significant developments that could impact their operations or financial performance.
In a significant development, Zydus Lifesciences and Formycon AG jointly announced that the USFDA accepted the Biologics License Application (BLA) review of a proposed biosimilar to Keytruda (pembrolizumab). According to the companies, this is the first publicly announced acceptance by the USFDA of an application for a Keytruda biosimilar. Pembrolizumab is an immune checkpoint inhibitor that binds to and blocks the PD-1 receptor and is used to treat numerous types of cancer. The BLA was submitted in the third quarter of 2026, with the USFDA looking at completing its review within 12 months comprising up to 60 days for filing review and 10 months for substantive response. Based on this timeline, a decision could be expected in the third quarter of calendar year 2027. As reported by CNBC TV18, Bernstein estimates this represents the first and currently the only pembrolizumab biosimilar accepted by the drug regulator.
The company reported strong revenue growth in the first quarter, with revenue increasing 22% to ₹8,017 crore from ₹6,573 crore in the previous fiscal year. However, EBITDA declined 7.6% to ₹1,929.4 crore from ₹2,088.5 crore in the same quarter last year. EBITDA margins contracted to 24.1% from 31.8% in the year-ago period. As reported by CNBC TV18, this margin compression reflects operational challenges despite strong top-line growth.
North American formulations sales showed mixed results, declining 2.6% year-on-year but growing 4.9% sequentially to ₹3,098 crore. According to the company's statement, this performance was driven by sustained volume expansion and new launches. The international markets business sustained its growth trajectory driven by strong demand, while the India branded formulations segment outpaced market growth for the quarter.
Shares of Zydus Lifesciences Ltd ended at ₹1,132.50, down 0.2% in the previous session following the announcement. However, the stock has gained 3.1% in the past month and is up 15.7% this year. Global investment banking firm Bernstein has maintained its 'buy' rating with a target price of ₹1,457 per share, indicating an upside of 28.7% from its previous close. According to Bernstein, their analysis suggests the company could capture approximately $500 million gross end-market sales as the base case for the Zydus pembrolizumab franchise. Of the 34 analysts covering the stock, 19 have a 'buy' rating, 9 have a 'hold' rating, and 6 have a 'sell' recommendation.
