Event Update: Ranbaxy Laboratories

Event Update: Ranbaxy Laboratories

In a disappointing move the USFDA has blocked 30 drugs generic drugs being manufactured out of Ranbaxy’s Dewas and Ponta Sahib facilities in India.

It has been inspecting the Ponta Sahib facility for almost two years. According to USFDA, Ranbaxy has violated the procedural issues of manufacturing.

Management is looking at addressing the concerns raised by USFDA. While it’s difficult to ascertain the loss of sales of these products according to a rough estimate the removal of these products from the US would entail a loss of sales of around 6%-10% of the overall sales of the US markets. It would not impact any of the FTF ( First-To-File) launches of the company.

Accordingly we have DOWNGRADED our US sales and target price on the stock to Rs500.