Ranbaxy surges 10.61% on hopes of US generic nod

New Delhi | Updated: Aug 29 2013, 13:50pm hrs
Jayati Ghose

Pharma major Ranbaxy Laboratories' stock surged 10.61% on Wednesday to close at Rs 418.55 on the BSE on the buzz that it may get US Food and Drugs Administration (USFDA) nod to launch the generic version of Novartis' anti-hypertension blockbuster Diovan in the US market this quarter.

The drug, which went off-patent in September 2012, enjoys sales of over $2 billion in the US market and is expected to generate $187 million for Ranbaxy during its six-month exclusivity period. The USFDA had given a tentative approval for Diovan (Valsartan molecule) to Aurobindo Pharma on April 19. However, the agency has not granted any final approvals for the drug to any other firm.

When we get approval for Diovan, we would still have the six-month exclusivity for its generic in the US market, Arun Sawhney, MD and CEO, Ranbaxy told FE recently.

A company spokesperson on Wednesday said, We will launch when we get formal USFDA approval.

Sources said that Ranbaxy had moved its application for Diovan generic to Ohm Laboratories after USFDA issued a Form 483 to the company's manufacturing facility at Mohali (from where the original application was submitted) earlier this year.

A Form 483 indicates that a facility may be in violation of some US Food, Drug and Cosmetic Act and related laws.

The launch of Valcyte and Ximino in the next few months, and Diovan possibly in CY 13, should ramp up US sales further, Girish Bakhru and Damayanti Kerai, analysts at HSBC Global Research wrote in a August 7 report.

Ranbaxys US sales at Rs 770 crore grew 29% in June quarter compared to Rs 596 crore in the March quarter. We shift Diovan launch to 4QCY13, assuming only half of the exclusivity related sales in CY13, wrote Saion Mukherjee and Aditya Khemka of Nomura in a August 8 research report.

Though the generics launch of anti-viral brand Valcyte was expected in second half of 2013, the launch of generics of anti-hypertensive brand Diovan (Valsartan) has already been delayed by almost a year (market anticipated the launch in 2012 itself), the management has indicated confidence at monetising both the opportunities, said analysts.