The Hindu Business Line : Pricing pressure, R&D spends drive Ranbaxy net down 48 pc

For the quarter ended June 30, 2005, Ranbaxy achieved consolidated sales of Rs 1,347.9 crore against Rs 1,258 crore earned during the corresponding period last year, a growth of 7 per cent while net profit stood at Rs 101.3 crore compared to Rs 195.8 crore last year, decline of 48 per cent.

The R&D expenditure in the quarter also increased substantially to $26 million, an increase of 105 per cent. This is attributed to the company's increase in bio-studies for generic filings and an increased number of product filings, worldwide.

For the first half of the year, Ranbaxy registered sales of Rs 2,486.2 crore as against Rs 2,565.9 crore last year, a degrowth of 3 per cent while net profit stood at Rs 172.1 crore against Rs 386.4 crore registered last year, a decline of about 54 per cent.

Speaking to Business Line, Dr Brian W. Tempest, CEO and Managing Director, said, "The second quarter results have been an improvement over the first quarter. The Europe and BRIC markets have grown this quarter while in the US we have managed to arrest the decline."

Ranbaxy will continue to focus on the US markets even as it expects pricing pressure to continue till the end of the year. "After Teva Pharmaceuticals buying out Ivax, we will have the second best product pipeline in the US. We have filed 11 products for regulatory approval there and expect to launch new products by the fourth quarter," he added.

Meanwhile Ranbaxy's litigation costs are expected to go up this year from the previous year's $25 million, as it challenges drug patents in the US and Europe.

"We're spending more money on litigation at the moment than we have done in the past," Dr Tempest said, without giving out a number. It is challenging Pfizer's patent on Lipitor, GlaxoSmithKline's Valtrex for herpes and Takeda Chemical Industries Ltd's Actos for diabetes.

Promoters' stake: The promoters of Ranbaxy Laboratories have been increasing their stake in the company. According to available data, the holding stands at 35.81 per cent at the end of June 30, 2006. It has grown from 32 per cent in September 30, 2004 to 35.03 per cent during the quarter ended March 31, 2005.

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