With four of its pharmaceutical plants in India banned from shipping products to the U.S., Ranbaxy Laboratories' U.S. operations have become essential to keeping product flowing into its biggest market. But with Ranbaxy's merger with Sun Pharmaceuticals getting close to closure, many of Ranbaxy's top U.S. execs are bailing out, putting some strain on its U.S. efforts.
According to India's Business Standard, Ranbaxy's top U.S. exec, Venkatachalam Krishnan, resigned last week along with other top execs overseeing sales, legal affairs and finance. Not only was Krishnan key to getting its Ohm Laboratories in shape to take over work lost from Ranbaxy's problems in India, but it also says his name appears on the consent decree the company signed years ago with the FDA. The document was key to the company's 2013 settlement with the Department of Justice, for which it also paid $500 million in penalties.
"The core team of Ranbaxy in the US which was running the show so far resigned in one go last week. This has created a lot of anxiety among other employees," a source told the newspaper.
In April, Japan's Daiichi Sankyo, which owns controlling interest in Ranbaxy Laboratories, agreed to sell the company to Sun Pharmaceutical in an all-stock deal that is now valued at about $4 billion. Its years of quality issues and FDA citations were seen as key to Daaichi Sankyo's decision to sell. The deal is slated to close at year end.
Sun has said getting Ranbaxy's Indian plants reapproved to ship to the U.S. is its top priority once the deal closes. In July, Ranbaxy announced it had promoted Arno Gessner to head global quality, replacing Dale Adkisson. Adkisson had been hired in 2010 to help the company fix its quality issues, but in the years since, FDA concerns have mounted, leading the agency to ban two more of Ranbaxy's Indian plants after earlier banning two.
But even in the midst of the uncertainty created by the merger, the FDA in June approved the Ohm Laboratories New Jersey plant to manufacture a generic of Novartis' ($NVS) heart drug Diovan. Its launch had been delayed for well over two years because the plants in India where Ranbaxy intended to make it had run into so many FDA issues and eventually were banned from exporting to the U.S. The approval for Ohm to handle the drug was seen as a sign that Ranbaxy's U.S. operation had proven itself to the FDA.
- here's the Business Standard story