Ranbaxy beats estimates on higher sales, forex gain
Drug maker Ranbaxy Laboratories on Thursday reported a consolidated net profit of Rs 754.2 crore for the quarter ended September, in line with street expectations. The revenues of the company during the quarter rose by a modest 31 per cent year-on-year to Rs 2,651.4 crore, driven by the launch of two authorised generics: Takeda’s Actos and Daiichi Sankyo’s Evoxac in the US.
Ranbaxy launched the generic version of anti-diabetes drug Actos in August and shares marketing exclusivity with Mylan Inc in the US.
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The rise in Ranbaxy’s net profit was also helped by its foreign exchange gains of Rs 393 crore in the July-September quarter.
Commenting on the results, CEO and MD Arun Sawhney said: “Company’s business performance continued to strengthen as planned even in a volatile regulatory and business environment, as our focus on key markets, improvement in manufacturing, R&D productivity and heightened level of cost consciousness helped our strong performance."
The company’s sales in North America jumped 60 per cent to Rs 919 crore during July-September , out of which the US sales contribute Rs 840 crore. In India, the formulation business of the company grew 13 per cent to Rs 583 crore.
However, the company’s active pharmaceutical ingredient (API) business has witnessed a slight dip. According to the company statement, it clocked Rs 178 crore from its API and some other businesses.
In a post-earnings address, Sawhney told analysts that the company has taken a strategic decision to shave off loss making and low-margin APIs. “We want to have a good product portfolio which makes business of Ranbaxy healthy," he said.
On its ongoing consent decree with the US Food and Drug Administration (US FDA), Ranbaxy is expecting the consultant assessment to be over by December, after which it will decide on its future course of action, Sawhney said.
He also said he is confident that the company will retain 180 days of marketing exclusivity for its generic version of Novartis’ blockbuster hypertension drug Diovan. Mylan Inc has sued the US drug regulator for not allowing it to market the generic drug, saying that Ranbaxy has lost its exclusivity for the drug as it has failed to get the tentative approval to sell the drug in the US within the specified period.
However, Sawhney said the Mylan case is unlikely to have a bearing on Ranbaxy’s generic of Diovan. “We will launch the product on approval," he said, refusing to speculate on the reason of delay in approval.
Ranbaxy also plans to launch Absorica in the US in the fourth quarter of 2012. Absorica is a novel, patented brand formulation of the acne medication isotretinoin, for the treatment of severe recalcitrant nodular acne. Ranbaxy would launch the drug through a business agreement with Canadian firm Cipher Pharmaceuticals Inc. As per the agreement, Ranbaxy will pay royalties on net sales to Cipher.
The company plans to spend around $35-40 million to expand its capacities in Malaysia. The company has recently received approval to set up a greenfield manufacturing facility in Malaysia. “On completion, this facility will triple the existing manufacturing capacity in the focus market for Ranbaxy," it said in a statement.
Shares of Ranbaxy Laboratories on Thursday closed at Rs 549.20 on the Bombay Stock Exchange, down 0.21 per cent from its previous close.