Ranbaxy woes hit profits
pharmafile | May 13, 2014 | News story | Manufacturing and Production, Sales and Marketing | Q1, Ranbaxy, Sun Pharma, manufacturing, recall
Indian generics maker Ranbaxy Laboratories has slipped up in the first quarter of the year, with profit sliding to 0.3 billion rupees – down from 1.26 billion rupees a year earlier – on sales of 24.4 billion rupees.
Ranbaxy is at the centre of a troubled $4 billion takeover bid by Sun Pharmaceutical Industries, which hit a major roadblock last week when an Indian court temporarily stopped the sale following concerns raised over insider dealing.
Ranbaxy was keen to highlight longer-term targets than its Q1 performance, with managing director Arun Sawhney saying: “Despite multiple challenges, Ranbaxy met its sales guidance and continued to build on its strengths.”
But the horizon remains cloudy for the firm, which has come under heavy scrutiny from the US Food and Drug Administration (FDA). “At the same time we continue to work closely with the regulatory agencies to address their concerns,” Sawhney added.
In January the FDA prohibited Ranbaxy from manufacturing and distributing active pharmaceutical ingredients (APIs) from its site at Toansa, Punjab, for FDA-regulated drug products.
Toansa makes around three-quarters of all the actives used in its generic products, and the company’s reduced ability to supply the US market – which accounts for around 40% of its turnover – has already had a material impact on its finances.
Ranbaxy, which is majority-owned by Japan’s Daiichi Sankyo, also faced a ban on drugs made by its Ohm Laboratories in New Jersey – a real problem for Ranbaxy since the green light shown to that facility by the FDA was something of a lifeline, opening a conduit to supply drugs to the US market.
Access to the US market is particularly important because Ranbaxy has marketing exclusivity for the first generic version of Novartis’ big-selling high blood pressure drug Diovan (valsartan) – but Ranbaxy has been unable to capitalise.
Ranbaxy cannot export any APIs from Toansa to the US for any purpose – and cannot provide material from there to other companies making products for the US market, the FDA insists.
Six Ranbaxy facilities have had problems meeting current good manufacturing practice standards – and at four of these the issues have been serious enough for the FDA to take direct enforcement action.
The FDA consent decree also encompasses the Ranbaxy facilities in Paonta Sahib, Dewas and Mohali: a year ago, the company was forced by the US government to pay $500 million in fines and penalties to settle criminal and civil charges related to charges of selling adulterated drugs.
Adam Hill
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