Ranbaxy exits Vietnam business; expects US FDA will lift ban on Dewas facility soon

Daiichi Sankyo-controlled Ranbaxy Laboratories has sold its Vietnam business, as part of the company’s ongoing restructuring operations.

Ranbaxy may soon sell another of its business soon as it wants to divest of some of its loss making businesses, Ranbaxy CEO and MD Atul Sobti has stated.

“We have divested the Vietnam operations and are also looking to sell operations of another country, which are not profit-making,” Atul Sobti said.

Ranbaxy has trimmed its sales force in the UK and closed down a small manufacturing plant with sizeable people in Romania.

Ranbaxy will continue to focus on the US market despite the regulatory ban on products manufactured in Ranbaxy’s indian facilities.

In September last year, the US Food and Drug Administration (FDA) banned 30 drugs made at the company’s Dewas in Madhya Pradesh and Paonta Sahib in Himachal Pradesh plants for alleged quality problems.

Despite the US sales being half of what it was, Ranbaxy’s cost in the US is actually higher because the company has continued with investment for the future.

Rather than layoffs and reduction, Ranbaxy has invested $30 million in capacity and people, Atul Sobti said.

Ranbaxy’s sales from the US dropped 53% at Rs 214 crore during the quarter.

Ranbaxy, which is quite sure of capitalizing opportunities in US market, plans to launch generic version of GSK’s drug Valtrex, which could potentially earn $150 million during the six-month exclusivity period.

Valtrex application has been filed from its Dewas plant that is currently facing ban by the US FDA.

Ranbaxy has already submitted its cross-contamination report to US FDA for its Dewas plant and expects the re-inspection in the next 1-2 months.

“We hope FDA has reviewed our report (for Dewas) and are awaiting for a re-inspection for a clearance,” Atul Sobti stated.

Meanwhile, Ranbaxy’s Poanta Sahib could take a longer period to get itself cleared by the US FDA as the  manufacturing facility has been charged with multiple violations in cGMP.

Ranbaxy, now plans to file more new drug applications from its upcoming Mohali plant for US & European markets.

In USA, Ranbaxy’s sales during the quarter ending  September 2009 were USD 44 Mn (Rs. 2,138 mn), a de-growth of 53% over Q3’08. This was primarily on account of ongoing US FDA issues and the discontinuation of omeprazole authorized generic.

Ranbaxy received final approval for glycopyrrolate and sumatriptan tablets 25/50mg. Ranbaxy also launched the authorized generic for Validus’ Rocaltrol.

Ranbaxy Laboratories Ltd has posted a third-quarter profit before tax at USD 33 mn (Rs. 1,601 mn) with an EBITDA margin of 13% to sales for the quarter ending on September 30, boosted by earnings fro emerging market sales including India and South Africa.
Net income was 1.17 billion rupees ($25 million) compared with a year-earlier loss of 3.95 billion rupees.

Sales in India, South Africa and other emerging markets contributed for 62 percent of Ranbaxy’s revenue.

Developed markets de-grew by 30%, primarily on account of loss of sales in USA because of the import alert and Application Integrity Policy imposed by the USFDA.

North American region recorded sales of USD 61 Mn (Rs. 2,955 Mn) during the quarter, a de-growth of 43%.