Australian and the European drug regulators have cleared a key manufacturing facility of Indias largest pharmaceutical company, Ranbaxy Laboratories Ltd, as fully safe. The clearance for Ranbaxys Paonta Sahib unit is crucial as the US Food & Drug Authority has banned imports from this unit to the USA, its largest market. The clearance will mean the company, with an annual turnover of Rs 7,251 crore, can continue to service markets in most markets except the US and Canada.

The European region and the Asia-Pacific region (Japan, Thailand, Australia and China) contributed around 25% of Ranbaxys global sales in the year ended December 2008. The company was acquired by the second largest Japanese drugmaker Daiichi Sankyo late last year. Ranbaxy shares gained 10.8% on BSE on Monday to close at Rs 161.05.

Medicines & healthcare products regulatory agency (MHRA) of the UK and the therapeutic goods administration (TGA), department of health & aging of the Australian government, have issued good manufacturing practice (GMP) certificates for (Ranbaxys) manufacturing site at Paonta Sahib, following a joint audit conducted in October 2008, Ranbaxy said in a statement to BSE on Monday.

The approvals from the two agencies will be valid for two and three more years, respectively. They will cover product filings for the UK and the entire European Union, the company statement said.

While sales in Europe contributed around Rs 1,427 crore to the company in 2008, the Asia-Pacific region recorded sales of Rs 425 crore. Sales in the UK for the previous year stood at Rs 164 crore.

The UK and Australian drug regulators had inspected the Paonta Sahib facility in 2006 and had found it to be compliant with the good manufacturing practices. These guidelines were up for review. The current approvals gain significance in the light of troubles that the Paonta Sahib production unit has run into, in the USA and Canada.

Late February, US FDA announced a halt to its review of new drug applications of Ranbaxy involving the Paonta Sahib unit because it had evidence of data falsification.