Japanese drug maker Daiichi Sankyo today reported a loss of $3.45 billion (335.8 billion yen) during the financial year 2008-09 and said it was on account of a steep fall in the share price of Ranbaxy, which it acquired last year.
The company said it booked “extraordinary losses due to one-time write-down of goodwill” worth $3.59 billion (351.3 billion yen) on Ranbaxy shares, which have dipped more than two-thirds since the deal was signed in June last year.
Daiichi Sankyo, the third-largest drug maker in Japan, last year acquired around 64 per cent in Ranbaxy Laboratories for around Rs 22,000 crore.
“The group posted a net loss of 335.8 billion yen (compared with net income (profit) of 97.6 billion yen ($1 billion) in the previous year as the result of recording 351.3 billion yen in extraordinary losses due to one-time write-down of goodwill pertaining to investment in Ranbaxy,” Daiichi Sankyo said in a statement.
However, the Japanese company said it expected to be back in the black in the current year and end the fiscal with a profit of 40 billion yen ($409 million).
The company’s sales in India and its neighbouring region during FY’08-09 grew by 69.4 per cent to 44.1 billion yen ($450 million). Ranbaxy alone contributed 21.1 billion yen ($215 million) in the overall sales of the company.
Meanwhile, sales in India were primarily driven by the launch of two drugs from Daiichi’s international portfolio, Olmesartan and Levolfloxacin, the company said.
More From This Section
The US drug regulator had imposed a ban in September last year on import of 30 drugs manufactured by Ranbaxy at two of its plants in India, alleging violation of good manufacturing practices. In February 2009, it invoked the application integrity policy (AIP) against the Paonta Sahib facility on charges of falsifying data and test records.
An AIP is invoked if there are concerns over integrity and reliability of data that is submitted for drug approvals.
“These regulatory actions could exert a significantly adverse impact on the group,” Daiichi Sankyo said, and added that it had established a joint taskforce of Ranbaxy management and industry experts to resolve the issues.