Ranbaxy planning more global buys

Ranbaxy Laboratories will continue its acquisition spree of the generic companies globally, Brian Tempest, chief mentor and executive vice-chairman of the company said.

"We would continue to grow organically and inorganically to achieve our targeted revenue of $12 billion by 2012," Tempest said. In 2006, Ranbaxy's revenue stood at $1.34 billion .

"We have almost completed our global geographical print through acquisitions except for a few countries," Tempest said. In January, Ranbaxy officials had said the company would bid for Merck's generic business when the bids open.

"It is too early to comment on it as nothing would happen before February end," Tempest said.

Explaining the company's inorganic growth strategy, Tempest said the top 15 countries account for 86 per cent of the $600 million global pharmaceutical market, with the US and Japan enjoying 45 per cent and 12 per cent of the pie respectively.

In 2006, Ranbaxy had moved most of its overseas research and development activities to India, thereby reducing cost.

Tempest said the company has no plans to hive off its R&D division into a separate entity. "Our research and development expenditure was more cost effective in 2006 and it will rise a little more in 2007."

During 2006, Ranbaxy's research and development expenditure dropped to Rs 3.87 billion from Rs 4.92 billion in previous year. R&D expenditure, as a percentage of net sales, fell to 6.42 per cent from 9.65 per cent.

The company will continue to focus on the US and Europe, apart from Japan, Brazil, Russia and the domestic market. Tempest did not indicate concern on production halt at the Ponta Sahib facility, which has not got clearance from the US Food and Drug Administration (USFDA) as it failed to comply with standards.

Asked how the company would overcome revenue loss due to supply stoppage from the unit, Tempest said, "We are currently catering to the US market from at least two other Ranbaxy factories."

On European market, where the company suffered price cuts and erosion, Tempest said the company has planned new products at lower cost to get better market share in the region. The company's revenue from BRIC countries grew 31 per cent to $477 million in 2006, driven by its acquisition of Romania's Terapia. While, revenue in India grew 19 per cent to Rs 11.58 billion.

At 2.28pm, Ranbaxy Laboratories shares were trading at Rs 418.25 on the National Stock Exchange (NSE), down 0.77 per cent on Thursday.