Hypertension drug to fetch Ranbaxy Rs 45 crore in US

Ranbaxy Laboratories may garner Rs 45 crore in the US market by selling atenolol, a drug for treating hypertension, analysts said today.

The company today received approval from the US regulator to market the drug as tablets in 25 mg, 50 mg and 100 mg doses. There are already 8-10 players in the US market for this drug, including generics majors Teva and Sandoz.

Ranbaxy may get about eight per cent share of this drug, the market size of which has been estimated at $133.6 mn (Rs 600 crore) in USA, said Sarabjit Kaur, an analyst at Angel Broking.

The drug master file for this drug has been out-licensed from Ipca Laboratories. A drug master file approval is given for supply of a bulk drug in the US market by the drug regulator.

Ipca is one of the world's largest producers of atenolol, and holds the drug master files for it in various countries.

Ranbaxy will initially manufacture this drug and also market it, a company spokesperson said. The spokesperson declined to comment on the revenue-sharing pact between Ranbaxy and Ipca for out-licensing the drug master file.

Later, Ipca will manufacture the drug for Ranbaxy once its plant in Indore is commissioned, analysts said. Ranbaxy may enjoy an operating margin of around 30 per cent on its revenue from this drug.

Analysts do not see substantial upside in Ranbaxy's earnings from this drug due to many players in the US market. The company will also have to share some portion of its profits with Ipca for the drug master file, they said.

This is the second drug from the Ranbaxy-Ipca strategic alliance. In September 2006, Ranbaxy had launched another hypertension drug, furosemide, through this alliance.

At 1:50PM, Ranbaxy Laboratories shares were traded at Rs 98 on the National Stock Exchange, up 1.6 per cent from Friday's close. Ipca Laboratories shares were traded at Rs 592, down 1.1 per cent.

For the 12 months ended December 31, 2005, Ranbaxy's global sales were at $ 1178 million. Overseas markets accounted for 78 per cent of global sales.

The company's largest market, the US, accounted for 36 per cent, while Europe and BRIC (Brazil, Russia, India, China) countries contributed 16 per cent and 26 per cent of global sales respectively.

Ranbaxy is now aspiring to achieve $5 billion sales by 2012 and be among the top five generic players.

The company's strategy to achieve this includes acquisition of generic brands overseas, emphasis on brand marketing in the US and Europe and entering high-potential new markets with value added product offerings.