Ranbaxy Laboratories said its base business would grow a modest 10 per cent this year after reporting a surprise quarterly loss on product recall charges.
Recall leads to loss for Ranbaxy
Ranbaxy Laboratories, India's top drug maker by sales, said its base business would grow a modest 10 per cent this year after reporting a surprise quarterly loss on product recall charges.
Controlled by Japan's Daiichi Sankyo, Ranbaxy reported a quarterly net loss of 4.92 billion rupees (Dh332.8 million) after setting aside 1.86bn rupees towards recall costs. Analysts on average had estimated consolidated net profit at 1.44bn rupees on net sales of 26.96bn rupees, according to Thomson Reuters estimates.
The drug maker in November voluntarily recalled its cholesterol-lowering generic of Lipitor from the US market after it discovered contamination with tiny glass particles in certain doses of the drug.
"This is really bad. This raises serious questions about transparency," said Daljeet Kohli, the head of research at brokerage IndiaNivesh.
"The company has been saying that this recall was voluntary and now it has made a huge provision for costs, which is not a good thing for any company to do."
After the product recall, Ranbaxy's market share of generic Lipitor fell to less than 3 per cent.
Ranbaxy launched the first generic version of Pfizer's Lipitor in 2011 and during its first six months on the market the company generated sales of nearly US$600 million (Dh220.4m), according to analysts estimates.
The company said it expects to achieve sales of more than 120bn rupees in the current fiscal year ending in December, compared with 124.6bn rupees reported last year.
Valued at $3.2bn, shares in Ranbaxy fell 3.95 per cent to close at 416.70 rupees yesterday. The shares have fallen 17.6 per cent this year compared to a 3.2 per cent drop in the BSE healthcare index.