The Hindu Business Line : ‘We want to be number one player in Japan’

Ranbaxy Laboratories has been the flag bearer of the Indian pharmaceutical industry for over three decades. Now with the ownership set to go into Japanese hands, Mr Malvinder Mohan Singh, CEO and Managing Director, gives an insight into how the historic deal shapes up for Ranbaxy.

How will the strategic alliance with Daiichi Sankyo help Ranbaxy’s plans?

Ranbaxy has a front-end presence in 50 countries and product marketing across 150 markets. While Daiichi Sankyo will leverage this network, this transaction will also add significant business to Ranbaxy. It will enable us to do so much more, especially in the Japanese generic market, where we want to be the No.1 player. Japan is the second largest pharmaceutical market in the world but generic drugs are on the lower side. We want to bring generics into Japan. Through this transaction, we will be far stronger to do a lot more than what we would have done on our own. It means a stronger product portfolio and a stronger balance sheet. As part of Daiichi Sankyo, we hope to be among the top 10 pharmaceutical companies in the world.

Could you not have retained some part of the stake in Ranbaxy?

We worked on a number of permutations and combinations and this is the best deal for the various stakeholders. Daiichi Sankyo was keen to have 50 per cent stake in Ranbaxy and that would not have been possible without the promoter family selling its equity. However, Daiichi Sankyo has given me the flexibility to pick up equity from the market.

What does this mean for Ranbaxy’s R&D and manufacturing capabilities?

I think this will enhance Ranbaxy’s drug delivery capabilities. Scientists at Ranbaxy Laboratories will leverage on Japanese know-how and bring innovation into India. On the manufacturing side, Ranbaxy is well positioned to supply APIs to Daiichi Sankyo’s global network. We have also decided to not pursue the demerger of New Drug Discovery Research unit into a separate entity. Combination of big pharma and generic is a new business model which is a first in the country and we will take advantage of being there first.

What do you propose to do with the cash you get from this deal? Will some of it be invested in your other companies like Fortis and Religare?

I have not thought about where I will invest the cash. We are always exploring opportunities to invest. But I had never thought that I would be in a position with no equity. Our focus on healthcare and financial services will continue.