Ranbaxy's poor Q4 show shifts focus to Sun Pharma's plans

Ranbaxy, the troubled Indian pharma firm that is now being acquired by Sun Pharma, has disappointed most analysts with its financial results for the fourth quarter (January to March 2014) and for the past 15 month period. Apparently, Ranbaxy is still having to cope with the challenges, especially on the regulatory front resulting from the curbs imposed on it by the US Food and Drug Administration (FDA).

Analysts now seem to be more keen on getting a greater clarity on the bigger picture on how its fortunes could take a turn under Sun. As one analyst pointed out: "The numbers are below expectations but today, in a sense, it really does not matter as much now depends on Sun Pharma and its plans."  

Ranbaxy has for January to March 2014 reported sales at Rs 24.4 billion and a net loss of Rs 737 million or Rs 73.6 crore. The company recorded a net profit before taxes of Rs 0.3 billion after providing for inventory write-off and other costs of Rs 0.6 billion. The company also made a provision of Rs 0.7 billion for impairment of goodwill in subsidiaries and diminution in the value of an investment in an associate. It recorded net foreign exchange gain of Rs 1.1 billion. However, what is not clear from the company is matters that could have immediate impact such as lack of clarity on its supply plans for drugs where it has market exclusivity.

In this, all eyes at the moment are on two drugs - the launch of generic versions of AstraZeneca's Nexium and Novartis' Diovan in the US. In a statement issued by the company along with the results, Arun Sawhney, CEO & Managing Director, Ranbaxy, said, "Despite multiple challenges, Ranbaxy met its sales guidance and continued to build on its strengths. At the same time we continue to work closely with the regulatory agencies to address their concerns."