One-month relief for Ranbaxy

Under fire in the United States for giving distorted information on the generic drugs it sold, Ranbaxy Laboratories today said that it will file all relevant information within a month after which the legal case initiated against it by the US government will be withdrawn.

This is a key disclosure in the response filed by Ranbaxy in a district court in Maryland yesterday against the "motion to compel" filed by the US government on July 3.

"The government has agreed to withdraw the motion once production (of the documents) is complete," the Ranbaxy response said.

Meanwhile, nervous investors continued to hammer the Ranbaxy stock, which fell 14 per cent on the Bombay Stock Exchange to Rs 409.25 today. Combined with yesterday's fall of 10.45 per cent, Ranbaxy shareholders have seen almost a quarter of their wealth evaporate in the last two trading sessions.

The Ranbaxy stock had risen 3.3 per cent from Rs 514 on July 3 when the US government informed it of the legal action to Rs 531 on July 11, the last trading day before the news broke out.

"Ranbaxy filed its response in the US court yesterday and prior to the filing, Ranbaxy had informed the stock exchanges," a Ranbaxy spokesperson said.

Ranbaxy, India's largest drug maker, is in the midst of being acquired by Daiichi Sankyo of Japan from the Singh family for $4.6 billion. The company has maintained the deal is on track. In an extraordinary general meeting, its shareholders today gave their nod to the takeover.

The US authorities have alleged that Ranbaxy has violated federal laws that have resulted in its introduction of adulterated and misbranded drugs in the US market, which accounts for 24 per cent of its revenue.

In its response, a copy of which is available with Business Standard, Ranbaxy has argued that it had withheld some information related to tests carried out at its facility at Paonta Sahib in Himachal Pradesh because it was privileged information.

However, the company has now decided to share with the US government all the audits carried out by Parexel, a US-based consultancy outfit, on the Poanta Sahib plant. Ranbaxy had engaged Parexel in 2006 to study the "good manufacturing practices" issues raised by the US Food and Drug Administration about the plant. It subsequently audited the "stability data" from the plant and was also involved in the company's quality systems improvement programme.

via:B.S