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Sep 16, 2013, 11.20 AM IST | Source: CNBC-TV18

'Doubt Ranbaxy claim that Mohali product filings not hit'

The question that needs to be resolved is what exactly is happening in terms of product filing and why is Ranbaxy saying that the product filings have not been impacted, says Vikas Dandekar, India Bureau Chief, PharmAsiaNews.Com.

Vikas Dandekar

India Bureau Chief, PharmAsia News.Com

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In the natural course we would have expected a warning letter to come out of the FDA’s office after the inspectional observation but that did not happen, it came straight on import alert.

Vikas Dandekar

India Bureau Chief

PharmAsia News.Com

The US Food & Drug Administration (USFDA) issued an import alert on Ranbaxy ’s Mohali unit on September 13. The inspectional observation was made way back earlier this year, but was not revealed by Ranbaxy, says Vikas Dandekar, India Bureau Chief, PharmAsiaNews.Com. Whenever there is an import alert, the company needs to redo all its manufacturing practices, give a renewed submission and that is reviewed, he says. So, it is a long haul again and it is like a repeat of history which happened in 2008, he adds.

Also Read: Ranbaxy crashes 35% on USFDA import alert for Mohali unit

Generally import alerts do not give deviations that have happened in the manufacturing system, but broadly it is a detention without any physical inspection, Dandekar says. The import alert was due to non compliance with drug good manufacturing practices (GMPs). The only recourse the company has now is to have site transfers of their product filings to Ohm Laboratories, he says.

However, the Ranbaxy management has consistently maintained that it is doing its product filing and nothing has stopped so far as Mohali is concerned, says Dandekar. So, that question needs to be resolved as to what exactly is happening in terms of product filing and why is Ranbaxy saying that the product filings have not been impacted, he adds.

Below is the verbatim transcript of Vikas Dandekar's interview on CNBC-TV18

Q: Explain to us the last note that the US FDA has carried on its website on Ranbaxy and what does it mean for the company?

A: It is a September 13 notice. Generally import alerts do not give the deviations that have happened in the manufacturing system, but broadly it is a detention without any physical inspection. It follows inspectional observation which were made way back earlier this year which was not revealed by Ranbaxy but it came out and it had issues with product contaminations and filings were stopped at that point of time and that was also a result why Atorvastatin had stopped coming out from the Mohali site.

So, in the natural course we would have expected a warning letter to come out of the FDA’s office after the inspectional observation but that did not happen, it came straight on import alert.

Whenever there is an import alert we have a situation where the company needs to redo all its manufacturing practices, give a renewed submission and that is reviewed. So, it is a long haul again and it is like a repeat of history which has happened in 2008 which is a second time an import alert has been issued on Ranbaxy side.

Q: In terms of earnings growth will it adversely impact its upcoming product launches like Diovan and Nexium or do you think the company can monetise all these three products from the Ohm Laboratories?

A: That is the only recourse that the company will to have site transfers of their product filings to Ohm Laboratories and that’s exactly what saved Ranbaxy from losing its exclusivity on atorvastatin. The product filings will move or probably has already moved to Ohm Labs. However, both Diovan and Valcyte were in question. September 22, 2012, was when it was expected, but it’s almost over a year now that has not happened. So, it is a big question mark.

The point which is curious is that the Ranbaxy management has consistently maintained that it is doing its product filing and nothing has stopped so far as Mohali is concerned. So, that question needs to be resolved as to what exactly is happening in terms of product filing and why is Ranbaxy saying that the product filings have not been impacted.

Ranbaxy Labs stock price

On July 30, 2014, Ranbaxy Laboratories closed at Rs 586.50, down Rs 3.5, or 0.59 percent. The 52-week high of the share was Rs 596.85 and the 52-week low was Rs 253.95.


The latest book value of the company is Rs 25.87 per share. At current value, the price-to-book value of the company was 22.67.

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