Mumbai: Ranbaxy Laboratories said on Wednesday it would not be able to launch a generic urinary drug as per schedule in the absence of a final regulatory approval, sending its shares down more than 6%.
India’s largest drug maker by sales was expected to launch the cheaper copycat version of Astellas Pharma’s Flomax in the United States this month, and analysts were expecting it to significantly boost earnings in the near term.
“It’s a blow to the company’s near-term outlook,” said Surya Narayan Patra, a sector analyst with Systematix Shares. “This drug was one of the few positive triggers at Ranbaxy people were watching out for.”
He said Ranbaxy would have been one of the first few generic firms to launch the copycat version of Flomax, which would have generated $93 million in sales during the 180-day exclusive marketing period.
But with players such as Impax Laboratories Inc launching their versions of Flomax ahead of Ranbaxy, chances of it providing an earnings boost to the Indian drug maker has faded, he said.
Shares in Ranbaxy, 64% owned by Japan’s Daiichi Sankyo, fell as much as 6.1% on the news but trimmed the losses to 1.3% by 1:18 pm at Rs473 while the main Mumbai market was up 0.9%.
Global demand for generic drugs from makers such as Ranbaxy and rivals Dr Reddy’s Laboratories and Cipla is booming as nations battle rising healthcare costs.
But recent warnings by US regulatory authorities to Indian drug makers for what it said was violation of good manufacturing practice are a concern for the sector.
In December, shares in Ranbaxy fell after the company said it had received a letter about violations of good manufacturing practices at its unit in New York.
“The Ranbaxy stock will continue to languish until the regulatory overhang goes away,” Patra said.
Ranbaxy had received tentative approval from the FDA in 2007 to launch the generic version of Flomax.
“We regret that despite our best efforts we were not able to get an approval for the subject product, and hence will not be in a position to launch the product,” Ranbaxy said in a statement on Wednesday.
It did not give any reasons for not getting the approval.
A spokeswoman for Daiichi Sankyo told Reuters in Tokyo that she was not aware whether Ranbaxy’s application had been rejected or the FDA was asking Ranbaxy for more data.