MUMBAI: Ranbaxy Laboratories, India’s top drugmaker by sales, said its base business would grow a modest 10 per cent in 2013 after reporting a surprise quarterly loss on product recall charges, sending its shares down more than 4 per cent.
Controlled by Japan’s Daiichi Sankyo Co, Ranbaxy reported a quarterly net loss of 4.92 billion rupees ($91.30 million) after setting aside 1.86 billion rupees towards recall costs. Analysts on average had estimated consolidated net profit at 1.44 billion rupees on net sales of 26.96 billion rupees, according to Thomson Reuters.
The drugmaker in November voluntarily recalled its cholesterol lowering generic of Lipitor from the US market after it discovered contamination with tiny glass particles in certain lots of 10mg, 20mg and 40mg doses of the drug.
“This is really bad. This raises serious questions about transparency,” said Daljeet Kohli, head of research at brokerage IndiaNivesh. “The company has been saying that this recall was voluntary and now it has made a huge provision for costs, which is not a good thing for any company to do.”
After the product recall, Ranbaxy’s market share of generic Lipitor fell to less than 3 per cent, according to industry estimates. The drugmaker has now resumed supplying the United States.
Ranbaxy launched the first generic version of Pfizer’s Lipitor in 2011 and during its first six months on the market the company generated sales of nearly $600 million, according to analysts estimates.
The company said it expects to achieve sales of over 120 billion rupees in the current fiscal year ending December, compared to 124.6 billion rupees reported in 2012.