Ranbaxy Laboratories, India’s biggest generic drugmaker by revenue, posted a narrower net loss in the latest quarter helped by ramped-up sales of two acne drugs in the United States, sending its shares higher.
Ranbaxy will be hard pressed to repeat the feat in the March quarter as the United States, which accounts for 40 per cent of revenue, has banned the import of products from Ranbaxy’s India factories because of quality concerns.
The US Food and Drug Administration (FDA) prohibited imports from two factories in 2008, one in September last year, and one last month for falling short of “good manufacturing practices”.
The latest two bans are likely to have more of an impact on future operations, giving Ranbaxy breathing space to report a much narrower October-December net loss of Rs. 159 crore.
That compared with a loss of Rs. 492 crore a year earlier when the company incurred costs recalling a cholesterol-lowering drug contaminated with glass particles.
Net sales rose 7 per cent to Rs. 2,859 crore, the company, majority owned by Japan’s Daiichi Sankyo, said in a statement on Wednesday.
Shares of Ranbaxy were trading up 4.5 per cent after the earnings release, compared with the Sensex, which was down 0.1 per cent.
Ranbaxy’s earnings are likely to be pressured from January-March by last month’s US import ban on products made at a factory in Toansa in Punjab, which supplied ingredients to its Ohm Laboratories in New Jersey.
The company on Wednesday said it had made a one-time Toansa-related provision of Rs. 257 crore in the October-December results.
“The company continues to fully cooperate with the US FDA and take necessary steps to resolve all concerns of the US FDA at the earliest,” Ranbaxy said in the statement without elaborating.