Hit by a higher than expected mark-to-market forex losses, Ranbaxy Laboratories missed Street estimates to post a loss of 586 crore for the quarter ended June but said it was hopeful of launching generic versions of two blockbuster drugs in the US in the next 60 days, potentially boosting revenues in the second half of 2012.
The Gurgaon-based company’s revenues increased 55% to 3,174 crore during the March-June quarter as compared to the year-ago period because of the income earned from the launch of cholesterol lowering drug atorvasatin with a six-month exclusivity in the US. The exclusivity period ended in May. Though the company also benefited from depreciation of the Indian currency against the US dollar in realisation of exports, a massive foreign exchange loss of 876 crore wiped out all gains.
“The depreciation of the INR against the US$ had an adverse impact on the company mainly on account of application of the accounting standards to Marking to Market the entire derivatives and foreign currency denominated loans outstanding. There was a net charge of 876 crore ($160 million) on the P&L on account of the forex items,” the company said. During the same period last year, the company clocked foreign exchange gains of 111.79 crore on its profit of 243 crore.
The result left analysts disappointed. Brokerage houseCLSA had estimated a forex loss of 650 crore. “Overall, it (the performance) was disappointing. Growth is stagnant in markets such as Africa, Latin America and India,” said CLSA analyst Hemant Bakhru. He attributed higher sales to more than expected revenue from atorvasatin, estimated to be around $170 million.
In a statement, Ranbaxy’s CEO & MD Arun Sawhney said: “Sales and profitability grew in the quarter with overall improvement across major regions, aided further by exclusivity sales in some of the key markets.”
Ranbaxy’s share price closed at 501.80, down 2.63% at the Bombay Stock Exchange on Thursday. The company has the opportunity to launch the generic version of Novartis $6-billion hypertension drug Diovanin September and Takeda’s $3-billion diabetes drug Actos later in August, six months ahead of other generic players. “… We are hopeful we will launch it (generic Diovan),” Sawhney said.
Sawhney said implementing the consent decree signed earlier this year with the US regulatory authorities was among its key priorities so that it can resume supply of drugs from its two Indian plants to the US. But he was non-committal about when the supplies would resume. “We have appointed a consultant (as per the consent decree condition). Once they submit their assessment report, only then can we give a timeline,” Sawhney said, adding the report is expected by September.
Driven by sales of atorvastatin, the world’s best selling drug, revenues from the key US market more than tripled to 1,377 crore during the quarter from the same period last year. The company said its market share for atorvastatin touched 55% during the exclusivity period, adding that it continues to maintain market share leadership with 40% share of the market even after the entry of multiple generic players.