$500M charge eats away at Ranbaxy's Q4 sales hike

The fourth-quarter snapshot view of Ranbaxy Laboratories isn't pretty: The Indian drugmaker posted its biggest loss in at least four years, thanks to a $500 million charge related to its wrangle with U.S. regulators and prosecutors. The Q4 loss amounted to $606 million.

But put the view in motion, and it's a bit more promising. Sales may have been sucked away by the $500 million charge, but they did grow by 79% to $759.37 million. And with its Lipitor copycat now on the market--and its troubles with the FDA wrapped into a consent decree--the company is walking forward on solid ground for the first time in several years. The settlement gives Ranbaxy "greater predictability in the U.S.," CEO Arun Sawhney said. And good thing, too--the U.S. is one of the company's largest markets.

Analysts say Ranbaxy's outlook for 2012 is "quite realistic," with sales projected at about $2.2 billion, only slightly higher than 2011's $2.02 billion. In fact, said LKP Securities' S. Ranganathan, the expectations might be on the conservative side. "[I]t does not include opportunities that might come from inorganic growth or product exclusivity ... so the growth might actually be higher," he told Reuters.

Key going forward is Ranbaxy's performance vis-a-vis the FDA consent decree. It's forfeiting its 180-day exclusivity rights on three as-yet-unnamed products--a blow to revenue the company has presumably baked into its 2012 forecast. But if it fails to meet future milestones set out by the FDA, it could lose exclusive rights on more copycat meds. Parent company Daiichi Sankyo is obviously anxious to keep that from happening; it's lost enough money on its Ranbaxy acquisition already, so it has sent in its own overseers to make sure the company performs.

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