Ranbaxy recalls Atorvastatin from US market, stock slips 2%

Moneycontrol Bureau

Shares of drug maker Ranbaxy slipped over 2 percent on Friday after the company said it was recalling some batches of its cholesterol lowering drug Atorvastatin (generic version of Pfizer's Lipitor) from the US market, and supplies would be affected until an investigation is completed. "Ranbaxy Pharmaceuticals Inc. is conducting a voluntary recall for Atorvastatin calcium tablets, in connection with its 10mg 20mg and 40mg dosage strengths, packaged in 90's and 500 count bottles and only with respect to certain select lot numbers. The recall does not affect or relate to the 80mg strength. The recall is being conducted at the retail level for such select batches that may contain a foreign substance (small glass particles approximately less than 1mm in size)," it said on its US website. Separately in a notice to stock exchanges, the company, owned by Japan's Daiichi Sankyo, said the recall will cause temporary disruption of supplies of the product. The investigation with regards to the issue is expected to be completed within two weeks and thereafter supplies could be resumed, it said. US is the biggest market for Atorvastatin and analysts say, the recall will have a huge impact on Ranbaxy's sales of the drug there. Ranbaxy had launched Atorvastatin in the US in December last year. It was among the first generic drug makers to get approval from US Food and Drug Administration to launch it. The company has garnered 45 percent market share in Atorvastatins in the US market and it will loose share to other generic players due to the disruption in supplies, said Hitesh Mahida of Fortune Equity Brokers. Atorvastatin 80mg strength, which is not a part of the recall, consists of 11.3 percent of overall Atorvastatin market, he added. Atorvastatin has seen 98-99 percent price erosion from the innovator's price following the generic launches. Therefore the impact of this recall at the EBITDA level reduces drastically due to the massive price erosion, according to Mahida.  Ranbaxy shares were down 2.4 percent at Rs 500.40 on NSE in noon trade.