The Hindu Business Line : Ranbaxy pins hopes on new drugs

PHARMA major Ranbaxy Laboratories Ltd has taken a severe beating domestically as well as globally due to price deflation in the US markets, increase in research and development (R&D) spends and high litigation costs.

However, the company is positive about its future outlook due to the possible launch of three drugs in the US market next year.

Speaking to Business Line, Dr Brian W. Tempest, CEO and Managing Director, Ranbaxy, said, "While we expect the price deflation to continue till the end of the current year and maybe run into the next year as well, we hope to launch a few drugs in the US in 2006."

The company is planning to introduce Pravastatin-80 mg (a cholesterol lowering drug) next year and is optimistic about launching Simvastatin-80 mg and Modafinil (the former for controlling cholesterol and mood-brightening and the latter as a memory-enhancing psychostimulant).

Dr Tempest said that while the company's investment in R&D had gone up by over 70 per cent, it did not anticipate a major increase in litigation costs. The company, which spent $25 million on litigation last year, is spending about $30 million in legal fees this year, as it challenges drug patents in the US and Europe. He, however, maintained that the company would continue to pursue litigations as part of its overall strategy.

According to Mr Jay Deshmukh, Vice-President, Intellectual Property, Ranbaxy, "We view the UK judgment on the suit against Pfizer's Lipitor as a partial loss and a partial win. The invalidation of one patent (calcium salt of atorvastatin) is a positive. If we could get something similar in the US litigation, we could get 180-day exclusivity in 2010 when that patent expires." Hearings in other countries such as Norway are also expected to take place in the near future.

Besides this, Ranbaxy is also battling companies such as GlaxoSmithKline Plc in the US to sell generic versions of Valtrex herpes drug as well as Takeda Chemical Industries Ltd's diabetes drug, Actos.

Dr Tempest also added that Ranbaxy would initiate talks with Roche Holding AG on licensing its bird influenza treatment Tamiflu. The company is in touch with various Governments to find out if they are interested in this product. "We have had the capability to manufacture the drug for about a year now," Dr Tempest added.

Meanwhile, analysts tracking the sector were disappointed with the results. "We do not know for how long the pricing pressure will continue. But the decline in profit is alarming," said a Mumbai-based equity analyst. "While the company is investing heavily in R&D and has a number of filings with the US regulator, only some big ticket approvals will boost the company's financials," he said.Ranbaxy's cumulative abbreviated new drug approval (ANDA) filings in the US now stand at 154, with 43 pending approvals with the regulator there. This year, the company filed eight ANDAs and received approval for 15.

In India too, during the third quarter, Ranbaxy filed 46 new patent applications bringing it to a total of 128 applications during the first nine months of 2005. On a cumulative basis, Ranbaxy now has filed 755 patents.

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