India’s Ranbaxy Laboratories has reported strong growth yet again with earnings for the third quarter climbing 48% though the strength of the rupee meant that revenues were fairly flat.
Net profit reached 2.07 billion rupees, around $52.4 million, but revenues edged up just 0.9% to 16.52 billion rupees, but in dollar terms the figures are more impressive and show that sales were up 15% to $406 million. Of that figure, US turnover made up $102 million, an increase of 7% compared to the like, year-earlier figure.
Ranbaxy’s performance in the USA was helped by the firm receiving approval from the US Food and Drug Administration to market its generic form of Bristol-Myers Squibb’s cholesterol-lowerer Pravachol (pravastatin), while its branded business benefited from the addition of the US rights to a range of dermatology products from B-MS at the end of May. As for Europe, sales were up 8% to $78 million, reflecting strong growth in the UK, Germany and the recently-entered markets of Spain and Italy, but Romania, where Ranbaxy bought Terapia in March last year, suffered flat sales at $23 million.
India contributed $81 million to Ranbaxy’s coffers, an increase of 15%, while sales in Africa rose 23% to $34 million. Latin America turnover improved 34% to $18 million, most of which came from Brazil.
Research unit to be spun off
Ranbaxy also confirmed that its board has agreed in principle to a spin- off of its drug discovery and research division and details of the de-merger should be finalised by the end of 2007. The company may choose to follow the path chosen by Dr Reddy’s, which has transferred a part of its new chemical entity pipeline to a joint venture, called Perlecan Pharma, set up with ICICI Bank and Citigroup or just set up a separate research unit, which fellow Indian firms Nicholas Piramal and Sun Pharma have done recently and which seems the most likely option. Ranbaxy said that the “resulting operational freedom and flexibility will also help to open up new growth opportunities while providing a platform for increased collaboration”.
Stake upped in Zenotech
The Gurgaon-based firm also announced that it has increased its stake in Hyderabad-based biotechnology firm Zenotech Laboratories from 7% to 45%. Zenotech has three India-approved oncology biologics treatments and a further seven are in the pipeline, and Ranbaxy said that the alliance is expected “to significantly enhance the company’s presence in two high potential segments” over the next decade – biopharmaceuticals and specialty injectables.
Commenting on the results, chief executive Malvinder Singh said that “our business performance remains strong and we expect this trend to continue for the remaining part of the year”. He added that the deal with Zenotech will boost his firm’s presence in biosimilars, claiming that it is “opportune and well timed, and will be a key growth driver for the company in the future”. The research spin-off will unlock significant value for the firm and its shareholders, Mr Singh concluded.