India’s largest drug maker by revenues, Ranbaxy Laboratories Ltd, has posted a net profit of Rs 963 crore for the quarter ended March 31, compared to a net loss of Rs 761 crore during the corresponding quarter the previous year.
Net sales during the period were Rs 2,486.7 crore, up by 60 per cent over the Rs 1,577.1 crore during the comparable period in 2009.
Forex gains and a one-time spike in US revenues due to a limited period exclusive market opportunity for its anti-herpes drug, Valacyclovir, were the major reasons for the growth.
Far better than expected
The result exceeded Ranbaxy’s own estimates, as the company had expected Glaxo to authorise one generic competitor to launch Valacyclovir (generic name of GlaxoSmithKline’s Valtrex) during the exclusivity period – which did not happen. The drug cornered a 60 per cent market share, hence the 266 percent increase in revenues from USA, said Atul Sobti, chairman and managing director. The company registered sales of Rs 1,151.5 crore in the US during the period under review.
Analysts termed the performance as impressive. “The company has made use of its first-to-file opportunity well. It has also got $50 million from a patent dispute settlement with Boehringer over heart burn drug Flomax,” said Ranjit Kapadia, vice president, institutional research, HDFC Securities.
The foreign exchange gain on foreign currency option derivatives for Ranbaxy was Rs 387.2 crore, as against a forex loss of Rs 954.8 crore during the corresponding quarter the previous year. Other operating income such as export benefits and income arising out of milestone payments and patent settlements accounted for Rs 280.3 crore in revenues during the quarter. The income under this head during the corresponding previous year’s quarter was Rs 22.3 crore.
Sobti said the company would better its performance once the synergy with Ranbaxy’s majority shareholder, Daiichi Sankyo of Japan, was completely in place.
The synergies are under various stages of implementation and Daiichi had recently announced the establishment of a new company, Daiichi Sankyo Espha Co Ltd, to market generic drugs primarily sourced from Ranbaxy in the Japanese market.
Research synergies – where Daiichi would make use of Ranbaxy’s low-cost drug discovery skills and also make maximum use of its strengths in developing generic medicines – is another area expected to be rolled out during the year, Sobti said.
US TROUBLE STILL ON
The company indicated its US troubles with respect to an ongoing inspection and ban on export of 30 medicines from one of its major production facilities in India is far from over. “We continue to cooperate with the US FDA (the regulator) for an early resolution of all outstanding issues,” Sobti said. The company, he added, was yet to receive an official charge sheet from the US Department of Justice, that had initiated an inquiry against Ranbaxy.
The company intends to focus on its newly commissioned production facility in Mohali for all developed country supplies in future. It has made regulatory filings for product approvals in Canada, Europe and US from this facility.
Ranbaxy shares closed 0.9 per cent higher at Rs 458.25 on the Bombay Stock Exchange. The benchmark Sensex was lower by 1.1 per cent.
