Ranbaxy falls as US settlement provision to hurt earnings
Shares of Ranbaxy Laboratories fell over 3% on Wednesday after the drug maker said it has signed a consent decree with the US Food and Drug Administration [FDA] and also has separately set aside USD 500 million to cover any potential penalty from an investigation by the US Justice Department.
December 21, 2011 / 17:13 IST
Moneycontrol Bureau
Shares of Ranbaxy Laboratories fell over 3% on Wednesday morning after the drug maker said it has signed a consent decree with the US Food and Drug Administration [FDA] and also has separately set aside USD 500 million to cover any potential penalty from an investigation by the US Justice Department. Analysts say the settlement with the US FDA is positive and a step forward in the direction of resuming exports from its Dewas and Paonta Sahib facilities. However, the penalty it will pay will hurt earnings and pressure balance sheet, they add.In 2008, the US FDA had banned Ranbaxy from exporting 30 drugs from its facilities in Dewas, Madhya Pradesh and Paonta Sahib, Himachal Pradesh and also stopped marketing approvals for new ones following quality control and data reporting issues.Ranbaxy on Wednesday said it has committed to further strengthen procedures and policies to ensure data integrity and comply with current good manufacturing practices."We are pleased to have resolved this legacy issue with the FDA as we begin the next chapter in Ranbaxy's history
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