Ranbaxy Laboratories may find it tough to revive its struggling US business in the face of accepting federal charges of selling adulterated drugs with intent to defraud and agreeing to pay $500 million to resolve false claim allegations, analysts say.

?This is the biggest safety settlement by any generic drug maker till date, and the acceptance of felony charges only makes the task of reviving an already struggling US business even tougher for Ranbaxy Laboratories,? Anmol Ganjoo, lead analyst (pharma) at Antique Stock Broking told the FE. He added that the company may take four to six quarters to see a turnaround in its US business as the new management ?works harder to remove the regulatory overhang left by the earlier management?.

?There is likely to be continuation of some negative sentiments on brand perception accrued from the event, however, since this has been a long drawn issue, there won?t be new impact on growth prospects,? said Kunal Dala, head of research at KR Choksey Securities.

Ranbaxy Laboratories is, however, confident that it will continue bringing ?safe, effective and quality medicines to market?. For the January-March 2013 quarter, US sales stood at R595 crore. During the quarter, the company filed three ANDAs for the US market, which included two potential first-to-file. Ranbaxy Laboratories also resumed supplies of Atorvastatin in the US market.

?Ranbaxy has successfully launched several generic products recently and is well-positioned for growth in the US and around the world with a robust pipeline of important products,? Ranbaxy MD & CEO Arun Sawhney said.

The case relates to US FDA inspectors? allegations about Ranbaxy?s practises in 2006. Three facilities at Paonta Sahib and Batamandi (Himachal Pradesh) and Dewas (in Madhya Pradesh) came under scrutiny in 2008. In December 2011, the company had set aside $500 million to resolve potential criminal and civil liabilities. January 2012 saw Ranbaxy reach a settlement agreement with US FDA, where it agreed to stop making drugs for the US market at two plants until these are brought up to US standards.

?The financial provision Ranbaxy established in December 2011 will be sufficient to cover all material financial obligations under the agreement,? the company said in a statement.

Experts are optimistic about the fact that the company can now focus on improving core business operations following the settlement of the criminal and civil lawsuit with the US government. ?The chapter has closed and now the new management can move ahead to focus on growth areas in all geographies,? a pharma expert said.

?While we are disappointed by the conduct of the past that led to this investigation, we strongly believe that settling this matter now is in the best interest of all of Ranbaxy?s stakeholders; the conclusion of the investigation does not materially impact our current financial situation or performance,? said Sawhney.

Analysts are positive about Ranbaxy?s stock performance. ?With this development, one of the overhangs on the stock is out. As in the latest quarter, the company posted operating margins of 6-7%, which is much below its peers and hence was the main reason for the stocks under performance,? said Sarabjit Kour Nangra (VP-research-pharma) at Angel Broking. ?According to the management it will take three-four years before margins come in line with its peers.?