Daiichi Sankyo is cracking the whip at new subsidiary Ranbaxy Laboratories. Malvinder Singh, CEO and scion of the Indian company's founding family, has made his exit--"with immediate effect," according to the company's press release. Taking over as CEO will be Atul Sobti, until now the company's COO.
Announced after a board meeting, the management changes aren't completely unexpected; after all, Ranbaxy has had its share of difficulties over the several months. After an FDA audit, the company lost its ability to export dozens of meds into the U.S. That hit Ranbaxy's top and bottom lines hard--it lost $155 million in the first quarter--and proved to be a severe drag on Daiichi's most recent results as well. And the FDA probe is still ongoing.
In a news release, Daiichi CEO Takashi Shoda thanked Singh for his "strategic vision and passion." Singh himself said it was the "right time" for him to "separate from Ranbaxy." In an interview with India's Economic Times, Singh said there was no "trigger point" for his departure; after all, the FDA probe has been going on for months. The millions in losses didn't hit the news until recently.
Can Singh's exit actually get Ranbaxy back on track? The Wall Street Journal Health Blog points out that Japanese-Indian business combos have run into trouble in the past. (The Financial Times goes so far as to call Daiichi and Ranbaxy an "odd couple.") But with a Daiichi-ite as chairman--Tsotomu Une replaces Singh in that role--the Japanese parent will now have more direct input at Ranbaxy. We'll have to wait to see whether that influence rights the ship.