Ranbaxy Laboratories, India’s largest pharma company, has sold its Vietnam business and is also looking to divest another, as part of a rationalistion move.
Ranbaxy’s problems due to regulatory issues in the US have bottomed out and the company is confident of monetising the lucrative drug launches, which will boost its sales in the world’s largest market, a top company executive told pharmaquest.biz
“We have divested the Vietnam operations and are also looking to sell operations of another country, which are not profit-making,” said Ranbaxy CEO and MD Atul Sobti, without divulging details. He told investors on Monday last that the company has trimmed its sales force in the UK and closed down a small manufacturing plant with sizeable people in Romania.
The company made a profit of Rs 116 crore for the quarter ended September 30, compared with a loss of Rs 394 crore a year ago due to less loss on currency bets, reduced expenditure and good sales from emerging markets. Its consolidated sales dropped 18% to Rs 1,720 crore from past year.
In December last year, it was reported that the company was planning to sell three of its businesses, including the one in Vietnam. In September last year, the US Food and Drug Administration (FDA) banned 30 drugs made at the company’s Dewas (Madhya Pradesh) and Paonta Sahib (Himachal Pradesh) plants for alleged quality problems.
He added the ongoing regulatory issue is a short-term problem and sales from the US market, in the following quarters, will be better.
“Despite the US sales being half of what it was, our cost in the US is actually higher because we have continued with investment for the future. Rather than layoffs and reduction, we have invested $30 million in capacity and people. The US will always remain an important market. We need to ensure that our future sales and filings are well protected,” he added. Its sales from the US slumped 53% at Rs 214 crore during the quarter.
The company’s inventory has been exhausted and any sales that come from the new drug launches, including first to file, will add to its sales. The company is scheduled to launch generic version of GSK’s drug Valtrex, which could potentially earn $150 million during the six-month exclusivity period. But he was non-committal on the launch date of Valtrex, the next drug launch with six-month marketing exclusivity due in late December. “All I can say is we will protect the six-month exclusivity period,” he said. The drug’s application has been filed from its Dewas plant that is currently banned by the USFDA.
To resolve the ongoing FDA issue, the company has submitted its cross-contamination report to the US drug regulator for its Dewas plant and expects the reinspection in the next 1-2 months, while clearance for Poanta Sahib, which has been slapped with much stringent action, will take longer. “We hope FDA has reviewed our report (for Dewas) and are awaiting for a reinspection for a clearance,” he said.
Meanwhile, the Gurgaon-based company has started filing new drug applications from its new plant in Mohali, and expects this plant located at its SEZ in Mohali to become as big as Dewas and Poanta Sahib in the next 2-3 years. Ranbaxy, now owned by Japan’s Daiichi Sankyo, will file 16-20 new drug applications for the US & Europe market every year from its upcoming Mohali plant.