India’s largest pharmaceutical group, Ranbaxy Laboratories, saw its full-year 2005 net profit plummet 62% to 2.6 billion rupees ($51.8 million), as mounting competition and a lack of major product launches ate into US sales.
US revenues, which make up a third of the firm’s total turnover, tumbled 22% to $322 million, although this was buffered by healthy growth of outside the region. In Europe, sales grew 5% $202 million, while in Brazil, Russia, India and China they rose 11% to 340 million, leading to a global dip of just 2% to $1.18 billion for the year.
Commenting on the results, which beat analysts expectations, Dr Brian Tempest, the group’s former chief executive who now serves as executive vice chairman, said: “While 2005 was a tough period, we strongly believe the business outlook will get better in 2006. Our basic belief in the underlying strength and potential of our core business operation, does not change.”
In order to help meet its forecast growth of 18% for this year, Ranbaxy is reducing its R&D budget by $20 million to $85 million, according to media reports. But new product launches should be the main growth driver during the year, fighting against continuing pricing pressures in the USA. And with a stream of blockbusters losing their patent armour over the coming years, Ranbaxy is in a good position to achieve its sales target of $5 billion by 2012.
Meanwhile, the group announced that Malvinder Mohan Singh, grandson of Ranbaxy founder Bhai Mohan Singh, has been elected to take over from Tempest as CEO and managing director of the firm.