Ranbaxy down 2% on fears of backlash from doctors
According to a newspaper report Jaslok Hospital in Mumbai has advised its doctors to stop using Ranbaxy's drugs. The report comes after Ranbaxy pleaded guilty in the US to felony charges related to manufacturing at two of its plants, earlier this month.
Moneycontrol Bureau
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 and another report said that the Indian Medical Association had asked the Drug Controller General of India to probe the quality of drugs that it produced and sold in India.Ranbaxy, now owned by Japan's Daiichi Sankyo, earlier this month pleaded guilty in the US to felony charges related to quality control and data reporting issues at two of its plants -- Paonta Sahib in Himachal Pradesh and Dewas in Madhya Pradesh. It also agreed to pay a fine of USD 500 million.Now, the Jaslok Hospital in Mumbai has put up an advisory, stating that Ranbaxy medicines won't be available at the hospital and doctors should, as far as possible, not prescribe these drugs, according to a Times of India report. Moreover, the IMA, itself plans to write to the DCGA to check if Ranbaxy's drugs are of poor quality, according to another report.An analyst at a local brokerage told moneycontrol.com that a marketing team from Ranbaxy did visit Jaslok Hospital on Tuesday and the advisory will now be removed. In any case, the analyst is not really worried even if some other hospitals were to issue similar advisories, since around 80-85 percent of its sales in India would be coming from prescriptions by Doctors running independent clinics and dispensaries. Ranbaxy shares were down 1.6 percent at Rs 389.55 on NSE in noon trade. As of Tuesday's close, the stock is down near 17 percent in the last fornight.The analyst remains bullish on the stock and feels the recent correction is only sentiment driven. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
