Ranbaxy shares declined a further 2 percent on Wednesday morning after a media report said a prominent hospital in Mumbai had advised doctors to stop using the pharma company's drugs.
Alembic Pharma has come in focus for having an in-licensing agreement with Ranbaxy for one of its drug. Speaking to CNBC-TV18, Alembic CFO RK Baheti said Ranbaxy will continue to market their drug in the US despite the negative newsflow hounding the phrama giant. Since the drug is produced at Alembic's own facility, Baheti does not expect US Food and Drug Administration (FDA) to cause any problem.
Ranbaxy has recently found guilty in the US of felony charges related to quality control and data reporting issues. On Tuesday, Jaslok Hospital in Mumbai had put up an advisory stopping the use of Ranbaxy drugs.
Below is the verbatim transcript of his interview to CNBC-TV18
Q: There has been a lot of negative news flow on Ranbaxy over the last few days- you got an in-licensing agreement for one of the drugs with Ranbaxy any impact that you see flowing through to your numbers because of that?
A: I don’t think so. We have internally evaluated. We have talked to the concerned people in Ranbaxy.
Ranbaxy continues to be committed to our products marketing in United States. Also the product comes from our facility, our manufacturing facility. There are no issues which we expect from Food and Drug Administration (FDA) point of view.
Q: What kind of revenues is this generating for you just to understand how important that is for you?
A: It is important for us, but it is early days for us to give a number. We have just launched the product. The product is yet to pick up in the secondary market. We expect in the next two to three months we will get a clear trend of customer acceptance. Then only we will be able to share more details on this.
Q: You had some fairly strong traction in terms of domestic sales you have talked about 15 percent in FY14 do you think you could better that guidance given the kind of domestic sales, trends you have witnessed?
A: No. When I gave the guidance or a number that is also factoring impact of the pharma policy. The ceiling prices are yet to be announced. Once they are announced we expect 3-4 percent impact on our domestic business on account of the pharma policy alone.
Assuming that the pharma policy or the ceiling prices are not notified too soon, to that extent we may do better.
Q: What about the exports market? While domestic formulations did quite well in 2013, FY13 exports were a bit sluggish do you see a big pick up in this year?
A: We see a big pick up in the current year. The export of formulation did not do so well last year. It was not because of business development activity, but more because of manufacturing constrain. We have put up a new plant. The plant is partial operational, significant portion of the plant is already operational. It will be fully operational by July or so. We expect 35-40 percent kind of growth in this year on international formulations.
Ranbaxy Labs stock price
On July 28, 2014, Ranbaxy Laboratories closed at Rs 590.00, up Rs 7.20, or 1.24 percent. The 52-week high of the share was Rs 592.00 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 22.81.
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