Ranbaxy posts loss on generic Lipitor recall
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Ranbaxy Laboratories, controlled by Japan's Daiichi Sankyo, posted a Rs 492.44 crore loss for the fourth quarter ended Dec 31, 2012, from a profit of Rs 754.17 crore in the September quarter, hit by a product recall in the US. The company follows a Jan-Dec financial year.
A voluntary recall of generic Lipitor shaved Rs 186 crore from its topline, even as the company made mark to market losses of Rs 261.9 crore on long term derivative contracts and foreign currency loans owing to a weaker rupee.
Shares of the company, which said its base business would grow a modest 10 per cent in 2013, fell 3.66 per cent to close at Rs 417.30 on the BSE on Tuesday.
In November 2012, the company had recalled cholesterol lowering Atorvastatin, a copy cat version of Pfizer's Lipitor, for select batches in the strengths of 10 mg, 20 mg and 40 mg tablets from the US market due to presence of foreign particles.
Since then it has been working with the US Food and Drug Administration (USFDA) to implement multiple corrective and preventive actions. The company said it is negotiating a settlement with the US Department of Justice, and has recorded a provision of $500 million in the year ended December 31, 2011.
On Monday, Ranbaxy said it has restarted the production of Atorvastatin as it looks to resume its supplies to the US market, cheering investors and sending shares up 4.8 per cent on the bourses.
"Ranbaxy will not be able to achieve the earlier market share (35-40 per cent), but still this is a limited competition product in the US," Edelweiss said in a research report Monday. "We expect Ranbaxy to regain 15-20 per cent market share with potential revenue of $22-25 million (currently there are four players in the market)." FE
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