New Delhi: Ranbaxy Laboratories Ltd, India’s largest drug maker by revenue, will play a key role in taking Japanese parent Daiichi Sankyo Co. Ltd into emerging markets and others outside Japan, Europe and the US.
Ranbaxy, a subsidiary of Daiichi since November 2008, is also likely to contribute to 23.4% of Daiichi’s total revenue by 2012 from the current contribution of 15% to the revenue.
Under the revenue guidance for 2012, Ranbaxy is likely to contribute almost $3 billion (Rs13,650 crore). Ranbaxy will also contribute significantly to Daiichi’s projected sales revenue of almost $1.7 billion from outside Japan, Europe and the US.
Ranbaxy has a strong presence in these markets as well as in Africa, Latin America and the Commonwealth of Independent States (CIS) region, recording annual sales in 2009 worth $125 million, $71 million and $86 million, respectively. Daiichi is likely to sell its patented products through Ranbaxy in these markets.
Extending stronghold: Daiichi<br></br>president Takashi Shoda. Harikrishna Katragadda/Mint
Daiichi, which on Friday announced its second mid-term business management plan (fiscal 2010-12), said one of the biggest challenges in achieving the planned synergies with Ranbaxy is the US import ban on two of its plants in India.
“Because of the US import bans we have been unable to achieve the synergies we had planned. This will be our key challenge in the next three years,” Daiichi Sankyo president Takashi Shoda told a news conference.
Daiichi will also establish a new generics business by April—Daiichi Sankyo Espha Co. Ltd. This will start operations by October and will provide high-quality, affordable drugs in collaboration with Ranbaxy. In India, Daiichi hopes to establish Ranbaxy as the top firm in the market by 2012.
Daiichi and Ranbaxy began leveraging their synergies through the hybrid business model in March, when the Indian company began marketing Daiichi’s anti-hypertensive drug Olvance locally. Later, the two companies launched another Daiichi product in Romania through Ranbaxy’s subsidiary there.
More recently, in February 2010, Daiichi and Ranbaxy announced that the parent’s innovator products would be sold in Mexico through a marketing division created last year within Ranbaxy’s Mexican subsidiary.
Under its business management plan for global product strategy, Daiichi will continue to generate further growth by collaborating with Ranbaxy.
(‘Reuters’ contributed to this story.)