Date:19/01/2005 URL: http://www.thehindubusinessline.com/2005/01/19/stories/2005011902830100.htm

Back Ranbaxy's Tempest upbeat on 2005

Nithya Subramanian

New Delhi , Jan. 18

THE fluctuating value of the dollar and increased investments in research and development in the fourth quarter seems to have taken some sheen off the profitability of Ranbaxy Laboratories Ltd last calendar year.

And the company is not taking any chances in 2005. Speaking to Business Line, Dr Brian Tempest, CEO and Managing Director, said, "We have hedged all our foreign exchange exposure for 2005."

While emphasising that the results are in line with the guidance issued by the company earlier, he said that the depreciation of the dollar against the rupee has been fully absorbed.

The company upped its R&D spends during the fourth quarter doubling it from $13 million in October-December 2003 to $26 million in 2004. Ranbaxy's investments here will see a double-digit growth this year, up from last year's $72 million.

New R&D unit

It is setting up a New Drug Discovery Research facility on the outskirts of Delhi, which will be called R&D III and will be operational from the second quarter of the current year.

While the company is planning to expand its presence in the US markets in a big way, Dr Tempest admitted that there have been pricing pressures in that market. He was, however, not willing to comment on the impact this would have on the company's revenues or profits.

Ranbaxy is preparing itself for the anticipated launch of atorvastatin in the US and Europe after an internal assessment of the arguments presented at the District Court hearing in the US in December 2004. "We have already started working on procurement of raw materials for the drug," he said.

Even though the company had setbacks due to the rofecoxib controversy and the withdrawal of anti-retroviral drugs from the WHO list, Dr Tempest said, "We have already filed three drugs for approval with the FDA." He did not put a figure to the losses incurred as a result of these withdrawals. The cumulative product filings with the FDA have reached 146 with 96 approved and 50 awaiting approval.

Acquisitions

The pharmaceutical company is looking at acquisitions in Germany and buying branded products in the US. Brazil has started generating profits for the group, registering a 37 per cent growth.

An investment of $100 million has been proposed to beef up its manufacturing capabilities. An advanced manufacturing plant in Brazil is being set up to cater to the market.

On the domestic front, Ranbaxy will be looking at more licensing arrangements.

Commenting on the recently announced MRP-based excise, Dr Tempest said that this is unlikely to have any impact. "Companies which outsource manufacturing would be impacted. We have several of our own manufacturing facilities in Himachal Pradesh and Punjab," he said.