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Ranbaxy down on reports of potential $1 bn penalty, strike

Ranbaxy down on reports of potential $1 bn penalty, strike
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First Published: Thu, May 05 2011. 10 41 AM IST
Updated: Thu, May 05 2011. 10 41 AM IST
Mumbai: Shares of Ranbaxy Laboratories were down more than 4% on reports of a potential settlement fee of about $1 billion with US authorities and an indefinite strike at Zenotech Laboratories, two dealers and an analyst said.
The Fortune reported quoting sources that federal prosecutors in the US have been negotiating a criminal and civil settlement with Ranbaxy and this could lead to Ranbaxy having to pay the penalty.
“We believe the settlement amount of $1 billion (as quoted in the article) is disproportionate to the profitability of Ranbaxy’s ANDA pipeline over the next 3 years and a $1 billion settlement amount could negatively impact its financials,” Goldman Sachs, which has a “neutral” rating on the stock said in a note on Thursday.
A Ranbaxy spokesman declined to comment. Separately, the Economic Times reported that workers at Zenotech Laboratories, in which Ranbaxy holds substantial stake, have gone on an indefinite strike.
At 10.31 a.m., shares of the pharma firm were down 4.41%at Rs 433.70.
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First Published: Thu, May 05 2011. 10 41 AM IST
More Topics: Ranbaxy | Pharma | Medicines | Penalty | US |