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Regulatory bans impacting sales across key markets dragged drugmaker Ranbaxy Laboratories into the red during the quarter ended March. The Gurgaon-headquartered pharmaceutical company, to soon merge into rival Sun Pharmaceutical Industries, reported a consolidated net loss of Rs 73.6 crore during the January-March 2014 quarter.
It had posted a net profit of Rs 125.7 crore during the year-ago period.
During the quarter this year, the company recorded inventory and other costs’ write-off and goodwill impairment write-off of Rs 16 crore and Rs 44 crore, respectively.
Recently, Mumbai-based Sun Pharma agreed to acquire Ranbaxy from Japanese owner Daiichi Sankyo in a $4-billion transaction, which includes an $800-million debt. While the deal is pending various regulatory approvals and is expected to be complete by the year end, the combination of the two will create the world’s fifth-largest generic drugmaker and the largest pharmaceutical company in India.
After a slew of regulatory issues at its Indian factories, Ranbaxy’s sales have suffered in its export markets such as the US and Europe. All four domestic factories of Ranbaxy — at Poanta Sahib (Himachal Pradesh), Dewas (Madhya Pradesh), Mohali (Punjab) and active pharmaceutical ingredient (API) manufacturing facility at Toansa (Punjab) — are banned from supplying medicines to the US. The company has also stopped API supplies from some plants to Europe.
During the March quarter, Ranbaxy’s consolidated revenues rose one per cent to Rs 2,436 crore compared with Rs 2,411 crore a year ago.
The company has changed its accounting year from January-December (calendar year) to April-March (financial year). So, the current accounting year is for 15 months. Ranbaxy has posted a net loss of Rs 1,085 crore for the 15 months ended March 31.
In the US, Ranbaxy recorded sales of Rs 770 crore during the quarter, up 19 per cent on a year ago. But sales in the US market declined sequentially by $22 million mainly due to the ban on supplies from the Toansa unit. Observers are hopeful under Sun’s guidance, Ranbaxy would see a fast resolution of its regulatory issues in the foreign market.
During a post-earning conference call with analysts, Ranbaxy’s CEO and managing director Arun Sawhney said planning for the integration of the two domestic majors have begun.
The Ranbaxy management also indicated that remedial costs at its various plants have come down over past few years. The company also initiated certain measures past few quarters to bring down expenses significantly.
Sawhney said the firm believes that it will be retaining its sales exclusivity on pending approvals in the US. Besides, the drug maker has recently made 10 new generic drug filings seeking approvals from the US regulator. Ranbaxy is currently allowed to manufacture and supply products from the US market only from its New Jersey-based Ohm Laboratories.
On Friday, Ranbaxy shares ended at Rs 463.60 apiece on the BSE, down 1.26 per cent from the previous close.
