Makes provision of Rs.186 crore for U.S. recall of atorvastatin
Drug major Ranbaxy Laboratories, on Tuesday, reported a consolidated net loss of Rs.492.44 crore for the fourth quarter ending December 31, 2012, mainly on account of the recall of its cholesterol lowering drug atorvastatin calcium tablets in the U.S. market. The company had posted a consolidated net loss of Rs.2,982.76 crore during the corresponding quarter in the previous year.
During the period under review, consolidated net sales of the company stood at Rs.2,670.80 crore as against Rs.3,752.01 crore in the the same quarter of the previous year.
“Profitability for the quarter under consideration is primarily impacted by the voluntary recall which impacts the quarter by Rs.186 crore and mark-to-market (MTM) loss of Rs.261.9 crore on long-term derivative contracts and foreign currency loans owing to a weaker rupee,” the company said.
For the full year ended December 31, 2012, the company had posted a consolidated net profit of Rs.922.76 crore as against a loss of Rs.2,899.72 crore in the year ago period.
Its net sales for the year 2012 were at Rs.12,252.89 crore as against Rs.9,970 crore.
Commenting on the results, Ranbaxy CEO and Managing Director Arun Sawhney said: “The year 2012 was a mixed year for us. While we delivered our strongest ever sales performance by monetising our major key product opportunities, we also faced challenges, primarily the recall of atorvastatin in the U.S., market at the end of the year.”
The company recalled atorvastatin, its generic version of Lipitor, from the U.S. market due to presence of foreign particles in 41 lots.
Since then, several corrective and preventive actions (CAPA) had been undertaken and the company had commenced shipment of the API to the company’s formulation facility in the U.S., Mr. Sawhney said. After the product recall, Ranbaxy’s market share of generic Lipitor fell to less than 3 per cent, according to industry estimates.
During the year ended December 31, 2011, the company had recorded a provision of $500 million.
This was done towards negotiating a settlement with the Department of Justice (DoJ) of the U.S. for resolution of a potential civil and criminal allegation by DoJ, Ranbaxy said.
“We have made good progress on the consent decree, honouring all our commitments till date,” he added.
In line with the company’s focus on differentiated products and branded strategy for the developed markets, it launched Absorica, as an NDA (new drug application) in the dermatological segment in the U.S., he added.
During the year, the company launched a new drug, Synriam, for the treatment of plasmodium falciparum malaria, in adults, the company said.
Giving outlook for the year 2013, the company said it expected its base business to grow by over 10 per cent.
Shares of Ranbaxy Laboratories, on Tuesday, closed at Rs.417.30 on the BSE, down 3.66 per cent from its previous close.