Ranbaxy shrugs off US lawsuit settlement; ends up 4%
Ranbaxy Labs shares recovered from early losses and ended up 3.6 percent on NSE on Tuesday. The company has agreed to settle all alleged civil violations with the US and its US arm is also pleading guilty to criminal charges related to Food, Drugs act.
Shares of pharma major Ranbaxy shrugged off early losses and ended up 3.6 percent at Rs 455.65 on NSE on Tuesday after analysts said the settlement of the US lawsuit now cleared a big overhang on the stock.
The company, owned by Japan's Daiichi Sankyo, said late on Monday that it and its affiliates have agreed to settle all alleged civil violations of the False Claims Act with the US and the company's US subsidiary is pleading guilty to criminal charges related to violation of the Food, Drugs and Cosmetics Act and other criminal statutes.
Ranbaxy will pay USD 500 million for both the civil and criminal settlements, which it had already made a provision for in FY2012, and so the payment won't have any impact on its earnings this year.
In 2008, the US FDA had banned Ranbaxy from exporting 30 drugs from its facilities in Dewas, Madhya Pradesh and Paonta Sahib, Himachal Pradesh and also stopped marketing approvals for new ones following quality control and data reporting issues.
The company entered into a consent decree with the US Food and Drugs Administration in 2011, under which it committed to further strengthen procedures and policies and to ensure data integrity and to comply with Current Good Manufacturing Practice.