Cipla‘s shares were soaring on Thursday after one of the company’s plants was virtually cleared by the U.S. Food and Drug Administration (FDA) for manufacturing.

What Happened: The FDA conducted a routine inspection at the firm’s manufacturing facility in Goa, between June 10 to June 21. Following the inspection, the regulator classified the facility under “voluntary action indicated”. This means that even though objectionable conditions or practices were found in the area, it is exempted from any administrative or regulatory action.

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This is a major relief for the pharmaceutical industry company as it paves the way for an earlier-than-expected approval and launch of cancer drug gAbraxane, Kotak Institutional Equities said. While the FDA might still mandate a pre-approval inspection for gAbraxane, the brokerage perceives the chances of this occurring as very low.

After a slew of U.S. delays, the Goa clearance will come as a big respite for Cipla, Kotak noted. It now expects the drug to launch by the end of FY25, ahead of its previous forecast of Q2 FY27. Subsequently, Kotak has now upgraded its earnings per share estimates for FY25, FY26 and FY27 to 1%, 5% and 2%, respectively.

The drugmaker, which makes a major chunk of its money in the North American market, posted a 15.2% year-on-year rise in its second-quarter net profit to ₹1,302.53 crore. It reported a revenue of ₹6,961.22 crore.

Price Action: Cipla was trading 8.34% higher at ₹1,536.60 on Thursday morning.

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