Ranbaxy reports first profit in six quarters with Rs477.75-cr Q2-FY’15 net

Ranbaxy Laboratories Ltd has reported a net profit of Rs478 crore ($78 million) for the July-September 2014-15 quarter, its first profit in six quarters, on the back of the exclusive US launch of Valsartan, a generic version of Novartis AG's blood pressure pill Diovan.

Ranbaxy, which is being bought by Sun Pharmaceutical Industries Ltd, incurred a net loss of Rs450 crore in the year-ago quarter, when it also took a foreign exchange charge of Rs360 crore.

Sales were Rs3,218 crore compared to Rs2,750.2 crore in the year-ago quarter. Sales were higher primarily due to exclusivity sales of Valsartan in the US during the quarter, Ranbaxy stated in a release.

Earnings before interest, tax, depreciation and amortization (EBITDA) stood at Rs807 crore while base business margins were in line with the corresponding quarter last year.

For the first half (April-September) of the 2014-15 financial year, Ranbaxy reported sales of Rs5,590.2 crore against sales of Rs5,334.1 crore in the April-September 2013-14 period. EBDTA for H1-2014-15 stood at Rs1045 crore.

''During the quarter, growth in base business was driven by India and Western Europe. In the US, we successfully launched Valsartan with 180 days exclusivity. Our focus continues to be on creating brands and providing differentiated products as future growth drivers,'' Arun Sawhney, CEO and managing director of Ranbaxy, said.

On 7 July 2014, the company launched Valsartan 40 mg, 80 mg, 160 mg, and 320 mg tablets on an exclusive basis. Valsartan is indicated for the treatment of high blood pressure and heart failure.

The India business recorded 12 per cent growth in line with the Indian Pharma Market (IPM) growth. The company expects to continue the momentum in the months ahead.

Ranbaxy's market share for Absorica, isotretenoin NDA in the USA was 20 per cent. (Source IMS).

Quality control issues had delayed Ranbaxy's drug launch for several months until it finally came to market in July.

Ranbaxy said it is working to resolving quality issues that led to the US Food and Drug Administration banning imports of all of drugs from the company's Indian plants under a wider scrutiny of the country's $15 billion pharmaceutical industry.

The drugmaker has also had to contend with US lawsuits. Earlier this month, Ranbaxy agreed to pay $39.75 million to settle litigation related to the manner in which it historically reported pricing data to Texas Medicaid, the U.S. federal-state healthcare program for people with low incomes.

That settlement came after the drugmaker pleaded guilty last year to felony charges relating to drug safety and agreed to pay $500 million in civil and criminal fines under a separate settlement with the U.S. Department of Justice.

Shares of Ranbaxy ended 5.9 per cent higher at Rs633.75, while the Nifty gained 0.5 per cent. Sun Pharma, its new owner, also rose in an otherwise dull market for the BSE Healthcare Index stocks.