FDA woes hit Ranbaxy in Q4

India's largest drugmaker Ranbaxy Laboratories has reported a fourth quarter loss of Rs698 crore. Analysts say the results were below expectations and losses were more that what had been estimated, with foreign exchange losses contributing heavily to the dismal performance.

However, the company's sales rose 6 per cent to Rs1909.6 crore on 7 per cent growth in emerging countries. These emerging markets contributed Rs1,022 crore or 54 per cent to the company's total sales.

The company's earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter stood at (-)Rs108.5 crore as compared to Rs297 crore for the same quarter last year. 

According to chairman, chief executive officer and managing director, Malvinder Singh, Ranbaxy had to face hurdles with the unprecented forex volatility and the FDA import alert but the company has been able to secure a future of high growth though the focus had been on resolving issues arising out of the avderse impact of the conditions prevailing in the year. 

The company sales in key overseas markets also suffered with the US sales falling 16.85 per cent to $89 million down from the corresponding figures of $104 million for last year. The US market which is the company's largest overseas market has been particularly hard hit with the US government banning 30 drugs.

Ranbaxy also took a hit on account of missing the late December launch date for GSK's  $1 billion drug Imitrex. The company had entered into an agreement with GSK that allowed it exclusive marketing rights for the generic version of GSK's drug, for a six month period, which would have earned the company between $80-$100 million.

Trends in key European were also on similar lines with markets declining in Romania (-11 per cent), UK (-13 per cent), France (-23 per cent) and Germany (-36 per cent) largely due to the weakening rupee.

Malvinder Singh said that the results were significantly impacted by three major factors AS30 impact of $161 million, forex impact of $179 million and US related provisions of $59 million and though non-cash in nature they primarily contributed to the overall loss of Rs9,14.6 crore ($198 million) for the year.

Japan's Daiichi Sankyo owns about 64 percent shares in Ranbaxy. Shares in Ranbaxy, which has a market value of $1.6 billion  plunged to 186.10 down 9 per cent in Mumbai market ahead of the results. The shares slumped about 41 per cent in 2008