Ranbaxy Q4 loss at Rs 492 cr on generic Lipitor recall

Written by fe Bureau | Mumbai | Updated: Feb 27 2013, 09:15am hrs
Ranbaxy Laboratories, controlled by Japans Daiichi Sankyo, posted a Rs 492.44-crore loss for the fourth quarter ended December, from a profit of Rs 754.17 crore in the September quarter, hit by a product recall in the US. The company follows a January-December fiscal.

A voluntary recall of generic Lipitor shaved R186 crore from its topline, even as the company made mark-to-market losses of R261.9 crore on long term derivative contracts and foreign currency loans owing to a weaker rupee.

Share of the company, which said its base business would grow a modest 10% in 2013, fell 3.66% to close at R417.30 on the BSE.

In November 2012, the company had recalled cholesterol lowering Atorvastatin, a copy cat version of Pfizers Lipitor, for select batches in the strengths of 10 mg, 20 mg and 40 mg tablets from the US market due to presence of foreign particles.

Since then it has been working with the US Food and Drug Administration to implement multiple corrective and preventive actions. The company is negotiating a settlement with the US Department of Justice, and has recorded a provision of $500 million in the year ended December.

Compared with a year ago, losses in the fourth quarter were significantly lower, as it benefited from better sales in major emerging markets, including India, where it grew 12%. Losses in the December quarter in 2011 were a substantial R2,982.76 crore.

The companys total income stood at R2,711.21 crore in the quarter ended December compared with R3,826.17 crore a year ago. For the full-year 2012, the company made a profit of R922.76 crore compared with losses of R2899.72 crore in 2011.

Arun Sawhney, CEO & managing director, Ranbaxy, said, 2012 was a mixed year for us. While we delivered our strongest ever sales performance monetising our major key product opportunities, we also faced challenges, primarily the recall of atorvastatin in the US market at the end of the year.

He said that Ranbaxy took a proactive action to voluntarily recall atorvastatin from the US market. We have since taken several corrective and preventive actions (CAPA) and commenced shipment of the API to our formulation facility in the US, he added.

Ranbaxy, in recent years, had much trouble with FDA scrutiny, leading to ban on sale of some of its products in the US. In 2008, the FDA banned the company from importing about 30 drugs after it found manufacturing deficiencies at two of the companys facilities in India, and Ranbaxy was later accused of falsifying data used in its drug applications.

We have made good progress on the consent decree honouring all our commitments till date, Sawhney added.

Meanwhile, the companys sales outside India fell to R2123 crore compared with R3248 crore a year ago. However, sales within India, net of excise duty, was R547.67 crore, up from R503.68 crore a year earlier. Gains from forex were lower at R28.16 crore compared with R90.55 crore a year ago. Cost of finance increased to R135.65 crore from R90.90 crore in the Dec quarter in 2011.