New Delhi: Japanese drug maker Daiichi Sankyo Co. Ltd saw a 13% rise in annual sales, helped by a strong contribution from Ranbaxy Laboratories Ltd, India’s largest drug maker by revenue, which it bought two years ago.
Daiichi’s sales grew to ¥952.1 billion (Rs46,586 crore) and pre-tax recurring profit rose by 87% to ¥103.1 billion for the year to 31 March.
“This was mainly due to a sales contribution of ¥146.6 billion by Ranbaxy Laboratories Ltd, which became a subsidiary in November 2008,” Japan’s No. 3 drug maker said in a statement on Wednesday.
Daiichi’s sales increased by 16% in the US and by 28.2% in Europe. In India, revenue rose 292.8% to ¥59.9 billion, mainly on Ranbaxy’s sales. Daiichi attributed its 76.4% increase in sales in other regions as well mainly to Ranbaxy.
As part of a plan to create a hybrid business model after the acquisition, Ranbaxy has begun selling Daiichi’s blood pressure drug Olmesartan and osteoporosis medicine Evista in India.
The two companies are now preparing to sell Olmesartan in six African countries and commercialize Daiichi’s drug portfolio in Mexico. The Japanese firm expects higher sales contribution from emerging markets, including the growth generated by Ranbaxy.
But Daiichi is also busy trying to resolve Ranbaxy’s problems with the US Food and Drug Administration (FDA).
In September 2008, Ranbaxy had received an import alert and warning letter on two of its plants—Dewas in Madhya Pradesh and Paonta Sahib in Himachal Pradesh. Last February, FDA invoked its application integrity policy on Paonta Sahib, thus halting review of all applications from the facility.
“The fact that Daiichi is guiding towards 11% top line (revenue) growth for Ranbaxy would imply that it is very gung-ho about it,” said Chirag Dagli, analyst with Pinc Research. “Ranbaxy’s first quarter results have shown that its non-US business has grown by about 11%, which is very encouraging.”
On Tuesday, Ranbaxy posted a net profit of Rs963 crore for the quarter ended 31 March, against a loss of Rs761 crore a year ago.
Sales had improved 60% to Rs2,490 crore, as the firm for the first time sold medicines in excess of $500 million (Rs2,255 crore) in a quarter.
Daiichi shares rose 1.8% after the results. Ranbaxy’s shares closed nearly flat at Rs459.20 on the Bombay Stock Exchange, on a day the benchmark Sensex added 54.28 points to end at 17,195.81.
Reuters contributed to this story.