The Hindu Business Line : Ranbaxy to rejig branded biz in US

THE US market continues to be problematic for Ranbaxy Laboratories Ltd. While the pricing pressures in the region remain, the poor off-take of some of its branded generic products has led to the company rejigging its range of drugs.

For starters, instead of promoting all the products in its portfolio through a field force, the company has decided to promote just two of them. Mr Malvinder Singh, President, Pharmaceuticals, Ranbaxy, told Business Line, "We have decided to juggle our products. While Proctosol (a topical corticosteroid) and Sortret (treatment for severe recalcitrant nodular acne) will continue to be promoted, we have decided to disengage the field force promoting Riomet (the liquid form of metformin for diabetes) and DisperMox (amoxicillin tablets for oral suspension)."

He said that this restructuring is being implemented, as some of the branded products have not been as successful as the company expected it to be. "Both Proctosol and Sortret have been moving well, while the others did not meet our expectations," Mr Singh said.

"The company did not see the prescription hits and there were costs to retain the products. It did not see much value in pushing these products through a field force," he added. However, interest in the branded drugs business will continue to remain with plans to acquire some more brands in the US.

According to analysts, the ride in the US market for Ranbaxy has become quite bumpy. "The pressure in the US continues to remain with the generic companies there, being forced to cut down the prices of their products. Along with this, it has had to withdraw Quinapril (for high blood pressure and heart failure) due to a US District Court ruling in favour of Pfizer. The appeal filed by the company will be heard in August this year. Added to this, the poor performance of its branded products, which led to a withdrawal, is not viewed positively," said a Mumbai-based equity analyst.

Hedging forex pays off

With the rupee appreciating against the dollar in the recent months, Ranbaxy's strategy of hedging its foreign exchange has yielded rewards.

During the first quarter ended March 31, 2005, it has managed to earn Rs 28 crore as gains. The company hopes that this strategy would pay off in the present quarter as well.

While the company recently announced a share spilt, its promoters have been hiking their stake.

The promoters stake has gone up to 34.32 per cent as on March 31, 2005 from 31.31 per cent as on March 31, 2004.

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