Ranbaxy swings to profit despite FDA investigation

Thursday, February 25, 2010
MUMBAI, India – Ranbaxy Laboratories Ltd., India's largest pharmaceutical company, returned to profit for the December quarter amid ongoing investigations into the quality of its generic medicines by the Food and Drug Administration.
Net profit for the three months was 4.9 billion rupees ($105.6 million), up from an 8.1 billion rupee loss a year earlier, thanks largely to the launch of a generic anti-viral drug in the U.S. Sales rose 54 percent to 15.6 billion rupees ($336.2 million).
'It was above expectations broadly, mainly because of Valtrex in the U.S.,' said Sarabjit Nangra, vice president of research at Mumbai's Angel Broking, referring to the anti-viral. 'Sales in Africa and Russia continue to be under pressure. They need shore up their growth in other regions as well.'
In September 2008, the U.S. Food and Drug Administration banned the import of more than 30 of Ranbaxy's generic drugs, citing poor quality at two production facilities in India.
In December 2009, the company received a warning letter from the FDA about manufacturing standards at its facility in Gloversville, NY.
The U.S. Department of Justice has also alleged that Ranbaxy lied about the ingredients and formulations used in some of its medications.
Chief executive Atul Sobti told reporters that those investigations 'are progressing and remain a key challenge for us in 2010.'
Tokyo-based Daiichi Sankyo Co. owns a majority stake in Ranbaxy.