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Ranbaxy tasted success for the first time in the 1960s with its tranquiliser, Calmpose. The drug, diazepam, was owned by Roche but it hadn't sought patent protection for it in India. Bhai Mohan Singh, who ran Ranbaxy at that time, located a drug maker in the Soviet Bloc which agreed to supply him as much diazepam as he wanted. Calmpose went on to become India's first pharmaceutical superbrand. Its marketing campaign was built around a couplet from Ghalib: "Maut ka ek din muayyim hai, Neend raat bhar kyun nahi aati?" (When the day of death is ordained, why does sleep elude me all night)
In 1970, India gave itself a new patent regime, under which it would recognise only process patents - companies like Ranbaxy were free to make any drug in the world so long as they adopted a different process. With some prodding from his US-educated son, Parvinder, Bhai Mohan Singh realised this was his chance to grow the company. As India was a poor country, it was decided to grow in the antibiotic sector. Land had been allotted to the company at Mohali near Chandigarh, where it wanted to put up a factory. To bankroll the investment, Ranbaxy did its maiden public issue in 1973. The offer, which was meant to mobilise Rs 70 lakh, was oversubscribed 14 times. The Controller of Capital Issues (an office now scrapped) asked the company to make allotments in lots of 50, instead of the prescribed 100, in view of the high investor interest.
By that time, popular antibiotics like penicillin, tetracycline and streptomycin had reached the end of their life cycle. In their place, semi-synthetic penicillin had started to change the world of antibiotics. The drug chosen by Ranbaxy was ampicillin. Ranbaxy was no stranger to ampicillin. Just like Roche hadn't bothered to obtain a patent on diazepam, Beecham had left ampicillin unprotected in India. Ranbaxy imported ampicillin in bulk and sold it under the brand, Roscillin. But the landed cost of imported ampicillin was high and Ranbaxy had to withdraw Roscillin from the market. Now, with its own factory at Mohali, the company re-launched it with much fanfare. It was an instant success. Ranbaxy followed it with more semi-synthetic penicillin drugs, a whole new category of antibiotics from the cephalosporin family and over-the-counter products (these can be sold without a doctor's prescription) like Revital.
In 1975, the scales tilted further in favour of Indian drug makers. A committee headed by Jaisukhlal Hathi decreed that for every one unit of bulk drugs Indian companies make, they can make four units of formulations. For multinationals, the ratio was fixed at 1:2. The Janata Party government tweaked it further to 1:10 in favour of Indian companies. It was said at that time that the Hathi committee report was drafted in Bhai Mohan Singh's drawing room, though there was never any evidence to suggest that. This was also the time that Davinder Singh Brar joined Ranbaxy from Associated Cement Companies, then a Tata enterprise. He would play a large role in Ranbaxy's growth, in India as well as abroad, in time to come.
In the 1980s, Bhai Mohan Singh split the business between his three sons: Parvinder, Manjit and Analjit. Ranbaxy came to Parvinder. There was some heartburn amongst the two younger brothers but it didn't come to the surface. The family saga turned nasty soon when Bhai Mohan Singh and Parvinder sparred in public over control of Ranbaxy. Parvinder had sensed that the pharmaceutical world was changing. If Ranbaxy had to survive, it would have to grow abroad, induct professionals and invest in research. What irked Bhai Mohan Singh was the reduction this entailed in the role for the family. At one time, no fewer than 30 relatives of Bhai Mohan Singh worked in key positions in the company. After a bitter battle, Bhai Mohan Singh was ousted from the company. Parvinder - aided in no small measure by Brar - put Ranbaxy on the road to become a multinational corporation.
But his innings didn't last long. Parvinder was detected with cancer of the oesophagus and died in July 1999. Days before his death, he had appointed Brar as his successor. At Parvinder's death, his two sons, Malvinder and Shivinder, put out a statement that they would respect their father's wish and would not seek a slot on the Ranbaxy board. Brar was the undisputed leader. The company now began to get noticed globally. In April 2003, Ranbaxy replaced Roche as the pharmaceutical partner in the synthetic peroxide project of the Medicines for Malaria Venture. On August 21, Pfizer shares fell 4 per cent, knocking out shareholders' wealth worth $7 billion, after investment analysts of Smith Barney down-rated the world's largest drug maker after concluding that its blockbuster blood thinner, Lipitor, may soon be under threat from a cheaper clone from Ranbaxy. In October of the same year, Ranbaxy signed a drug discovery and clinical development agreement with GlaxoSmithKline. In January 2004, it did the largest overseas acquisition by an Indian drug maker: RPG Aventis of France for $65-70 million.
Brar exited soon thereafter. The baton passed on to Malvinder. He did a string of takeovers abroad and would claim he was the biggest Indian acquirer of assets abroad after Ratan Tata. Then, in 2008, in a move that shocked one and all, the Singh family sold its 34.8 per cent stake in Ranbaxy for $2.4 billion to Daiichi Sankyo of Japan. After that, Ranbaxy's fortunes went downhill. Four of its Indian factories approved by the United States Food & Drug Administration were barred from selling in the US for improper manufacturing practices. Then the company admitted that it had fabricated data while seeking approvals from FDA and paid $500 million to close the case. The incident forced Daiichi Sankyo to say that important information was withheld from it at the time of sale and it was pursuing "available legal remedies". Finally, earlier this year, Sun Pharmaceutical agreed to acquire Ranbaxy in an all-stock deal that valued the company at $3.2 billion, less than half of the $6.9 billion at the time of the Daiichi deal.
