"From January 1, 2008 our R&D arm would operate as a separate entity," Ranbaxy Chairman and Managing Director Malvinder Mohan Singh said on the sidelines of Fortune Global forum.
He said Ranbaxy's expenditure on R&D would not be reflected in its consolidated revenues from that calendar year.
The company, had earlier this month announced the demerger of its R&D operations to unlock the value for its shareholders.
It had last year spent about USD 100 million (Rs 400 crore) on R&D operations.
Ranbaxy employees 1,400 people in R&D operations.
Singh said, Ranbaxy expects to launch a drug based on new anti-malarial chemical entity by 2011.
"The new chemical entity is in phase II clinical trial and the money spent on it would not be reflected on our consolidated revenues," Singh said.