The Board of Directors of Ranbaxy Laboratories Limited at their meeting held today, took on record the unaudited results for the quarter ended September 30, 2008.

 

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Key Financial Highlights:

• Consolidated net sales at Rs. 18,884 Mn, a growth of 14% (USD 431 Mn).
• Emerging markets portfolio achieves sales of Rs. 10,644 Mn, with a strong growth of 20%; accounts for 56% of sales (USD 243 Mn).
• Developed markets sales grew by 9% to Rs. 7,089 Mn (USD 162 Mn); accounts for 38% of sales.
• Earnings before Interest, Tax, Depreciation & Amortization (EBITDA) for the quarter is Rs. 1,440 Mn (8%). EBITDA for the year to date is Rs. 7,253 Mn reflecting a margin to sales of 14%.
• Gross margin on year to date basis maintained at 51% despite adverse economic conditions this year.
• Over the current year there has been a consistent improvement in Working Capital management with a result that the Company’s Gross Working Capital has reduced by 5%.

After accounting for Foreign Exchange Gains/Losses on translations and exceptional items, the Profit After Tax for the quarter is Rs. (3,945) Mn (USD (96) Mn) (YTD Sep’08 Rs. (2,348) Mn (USD (56) Mn).

 

Commenting on the developments in the quarter, Mr. Malvinder Mohan Singh, CEO and MD, Ranbaxy, said “As part of our strategy to rebalance our portfolio, we have been focusing on strengthening our emerging markets business which continued to deliver strong growth in Q3’08. We have also achieved a significant milestone with Daiichi Sankyo acquiring a majority stake in Ranbaxy. This will create a strong global innovator and generic powerhouse. The quarter also had its challenges including unprecedented forex movement and some losses relating to the turn of events on the USFDA front. We continue to cooperate closely with the US authorities and remain positive that outstanding issues will be resolved.”

 

 Key Highlights/Developments :

Ranbaxy and Daiichi Sankyo close to completing the landmark deal. Daiichi Sankyo acquires 52.5% of the equity share capital of Ranbaxy through acquisition of shares under open offer, allotment of shares on preferential basis and acquisition of shares from the existing promoters.

 

The Company receives Rs. 35,849 Mn against Preferential equity and warrants issued to Daiichi Sankyo.

 

The Company obtained approval from the Drug Controller General of India (DCGI) to initiate Phase-III human clinical trials in India for its new Anti-Malaria combination molecule, Arterolane Maleate in combination with Piperaquine Phosphate.

 

The Company submitted an Investigational New Drug application to the DCGI for permission to initiate Phase-I human clinical trials for the Respiratory Inflammation candidate identified by the joint GSK-Ranbaxy steering committee.

 

 The Company, under an agreement with AstraZeneca Pharmaceuticals launched an authorized generic of Omeprazole 40 mg Capsules in the U.S. healthcare system. 

 

The WHO, Geneva, approved and included Abacavir 300 tablets, an Anti Retroviral drug in its pre-qualification list. With the inclusion of this drug, Ranbaxy now has 18 ARVs on the WHO pre-qualification list.

 

The Motion filed by the US Department of Justice was withdrawn, subsequent to Ranbaxy producing a comprehensive set of audit documents.  Ranbaxy remains confident that its pharmaceutical products are safe and effective and remains committed to continuously cooperate with all relevant authorities.

 

The Company has received two warning letters from USFDA on its Dewas and Batamandi facilities followed by an   import Alert in the US market for 30 formulations and seven APIs manufactured at Dewas and Poanta Sahib sites. 

 

Ranbaxy retained the services of former New York City Mayor Rudy Giuliani and Giuliani Partners to provide advice to the Company on matters in the US.

 

The UK Serious Fraud Office's (SFO) prosecution of the Company’s UK subsidiary, Ranbaxy (UK) Limited, was quashed by the English Crown Court.

Consolidated Results (Ranbaxy Laboratories Limited and Subsidiaries)

Quarter ended September 30, 2008 (Q3)

 

Global Sales

In Q3’08, Consolidated sales were Rs. 18,884 Mn (USD 431 Mn), exhibiting a growth of 14% on yoy basis. Emerging markets accounted for 56% of global sales at Rs. 10,644 Mn (USD 243 Mn), and grew by 20%. The emerging market sales were led by strong performances in Romania, CIS and Latin America markets. Developed markets contributed 38% of global sales (Rs. 7,089 Mn; USD 162 Mn) and grew at 9%. Strong growth in Canada and Japan was partly offset by lower than expected performances in Europe and USA.

 

North America

USA 

During the quarter Ranbaxy launched its first authorized generic Omeprazole 40 mg Capsules in the US market – under an agreement with AstraZeneca Pharmaceuticals.  AstraZeneca’s Prilosec® 40 mg had sales in the U.S. market of  USD 204  Mn  (IMS: March, 2008 MAT).

 

USA recorded sales of Rs. 4136 Mn ( USD 94 Mn) for the quarter, at similar levels as previous year. The overall market share of Ranbaxy in the US generic market (in the molecules where the Company is represented) was 10% for Q3’08.

 

US FDA development

In a recent significant development, the Motion filed by the US Department of Justice (DOJ) was withdrawn after Ranbaxy provided the DOJ with a comprehensive set of audit documents. Earlier in July, 2008, the DOJ had filed a motion against Ranbaxy seeking certain documents. While Ranbaxy strongly refutes the allegations contained in the Motion, it will continue to defend its position and cooperate with the DOJ and all regulatory and legislative authorities to arrive at a swift resolution of all the issues.

 

The USFDA issued warning letters and Import Alert for Drugs produced in two Ranbaxy plants in India. The issues raised in the warning letters relate to “process concerns” and not to product quality, safety or effectiveness.  Ranbaxy is however, pleased that USFDA's testing and review led the agency to conclude that there is no reason to question the safety or effectiveness of Ranbaxy's drugs which is further substantiated by the fact that FDA has strongly advised the US consumers to continue using medication manufactured by Ranbaxy as there is no evidence of harm being caused to the patients.

 

Reiterating its commitment to work cooperatively with the relevant authorities in the US, the Company retained the services of former New York City Mayor Rudy Giuliani and Giuliani Partners to provide advice to the Company on matters in the US.

 

Canada

The business in Canada continued to show strong growth. Sales in the quarter were Rs. 719 Mn (USD 16 Mn), a growth of 139% over the previous corresponding period. During the nine months ended September, 2008, Canada registered sales of Rs. 1688 Mn (USD 40 Mn), an impressive growth of 102%. The Company made two promising launches during the quarter viz., Rabeprazole and Pantoprazole.

 

Europe

In Q3, Europe (including Romania) registered sales of Rs. 3,653 Mn (USD 83 Mn), a growth of 15%. Sales in Poland, Italy, Nordic countries and the Baltic States grew 88% to Rs. 486 Mn (USD 11 Mn). Revenues witnessed a downward trend in UK, France, Germany due to continuing competitive and pricing pressures. Combined sales in these countries were Rs. 1,495 Mn, a de-growth of 6% (USD 34 Mn).

 

The English Crown Court quashed the UK Serious Fraud Office's (SFO) prosecution of the Company’s UK subsidiary, Ranbaxy (UK) Limited. The Court also declined an application by the SFO for permission to appeal to the English Court of Appeal.

 

Romania

Romania recorded sales of Rs. 1,235 Mn (USD 28 Mn), a growth of 34% over the corresponding previous period. Ranbaxy is currently the largest pharmaceutical company in the Romanian generic segment with 12.9% market share. It has grown faster than the market (14.7% versus 11.6%; IMS Data) during the quarter.

 

Asia Pacific, Middle East and CIS (Including Sri Lanka)

Sales during the quarter were Rs. 6,296 Mn, a healthy growth of 19% (USD 144 Mn). The growth was led by CIS & Japan. 

India (Excluding Global Consumer Healthcare):

The sales for the quarter were at Rs. 3,542 Mn (USD 81 Mn), a growth of 7% over the previous corresponding period.

 

During the Moving quarter (Jun-Aug 2008), Ranbaxy garnered 5.08% market share (5.11% on MAT basis) maintaining its Number 1 rank in the domestic formulation market for the period as well as for the entire Q2’08 period. The Company’s growth for the period was 11.1% against a market growth of 6.7%.

Contribution of Chronic therapy portfolio for Ranbaxy to total sales stands at 25.1% (August, 2008 YTD) against 23.9% over corresponding period, last year. Ranbaxy’s Chronic Portfolio has grown at a pace of 22.6%, significantly higher than the 13.8% growth for the market. Penems portfolio (Cilanem, Faronem, Zivator) captured 21.5 % share in the segment (August, 2008 MAT).

In the major Chronic therapies like Cardiovascular & Anti-diabetics, Ranbaxy registered a higher growth of 33.4 % and 24.5% against a market growth of 15.3% and 16.4% respectively (YTD August, 2008 basis).

 

Ranbaxy continued to lead in the anti-infective therapy with 11.1% share for the YTD August, 2008 period.

 

The Company maintains strong leadership in the branded pharmaceuticals segment with 5 of its brands in the top 30 and 18 brands in the top 300.

Among new launches, Ranbaxy currently has 4 products in the top 30 new introductions during the last one year.

 

CIS: Russia & Ukraine Belt

Sales in the region during Q3’08, grew by 54% to Rs. 1,413 Mn (USD 32 Mn). In Russia sales grew by 64% to Rs. 887 Mn (USD 20 Mn), while sales in the Ukraine belt grew by 40% to Rs. 525 Mn (USD 12 Mn). YTD September sales in the CIS are Rs. 3,388 Mn (USD 81 Mn).

 

Asia Pacific (excluding India)

Sales in this region were Rs. 1,070 Mn, registering a growth of 31% (USD 24 Mn). The growth was led by a diverse set of markets including Japan, Malaysia, Australia & New Zealand, etc. In Japan, Ranbaxy had a day one launch for Amlodipine.

 

Middle East & Sri Lanka recorded sales of Rs. 271 Mn (USD 6 Mn) during the quarter, registering a growth of 19% over the correspondence quarter of last year.

 

Africa

Sales during the quarter were Rs. 1,436 Mn, a growth of 4% (USD 33 Mn). During the nine-month period ending September, 2008, sales were Rs. 3948 Mn, a growth of 6% (USD 95 Mn). Sales in Nigeria grew 21% to Rs. 309 Mn (USD 7 Mn). Sales of Ranbaxy in South Africa grew by 3% to Rs. 728 Mn (USD 17 Mn). In South Africa, Ranbaxy has maintained its ranking at Number 5 among generic players in the country. The company launched two new products, Gabapentin and Peridopril, in South Africa during the quarter. Rest of Africa recorded de-growth of 3% to Rs. 399 Mn (USD 9 Mn).

 

Brazil & Rest of Latin America

Brazil: Sales were Rs. 686 Mn in Q3’08, 39% higher than corresponding quarter of last year (USD 16 Mn). The company is currently ranked 6^th in the generic market and has improved its market share from 3.4% in Aug 07 to 4.1% in August 2008.

 

Rest of Latin America: registered sales of Rs. 338 Mn during Q3’08, a growth of 45% (USD 8 Mn). Growth was led by Peru, Ecuador, Colombia, Caribbean Islands and Central America.

 

Global Consumer Healthcare

Sales for the quarter were Rs. 458 Mn, registering a growth of 16% (USD 10 Mn). YTD September, 2008 sales grew 23% to Rs. 1,317 Mn (USD 32 Mn). Revital, a key brand further increased its market share to 85.4% (ORG SSA YTD August, 2008). Revital was ranked at No. 16 as against No. 28 in August 2007. (ORG-SSA MAT August 2008). Another major brand, Chericof, grew by 30.3% over last year on a MAT basis (Source: ORG-SSA MAT August, 2008).

 

Research & Development

Ranbaxy made good progress in the area of New Drug Discovery Research.

The Company obtained approval from the DCGI to initiate Phase-III human clinical trials in India for its new drug for treatment of malaria, Arterolane Maleate + Piperaquine Phosphate.  This drug had successfully completed the Phase II trials in Thailand and India.  Ranbaxy has plans to seek regulatory approval in other countries such as Africa, South & South East Asian counties for Phase-III clinical trial at the earliest.

 

Under the joint drug discovery programme with GlaxoSmithKline (GSK), the Company achieved a significant milestone by submitting an Investigational New Drug (IND) application to the DCGI, seeking permission to initiate Phase-I human clinical trials for its Respiratory/Inflammation candidate. The Company also plans to file an IND in Romania shortly and will very soon initiate Phase-I trials on this molecule both in India and Romania.

 

Sourced From: Ranbaxy Laboratories Ltd