|Sun Pharma Managing Director Dilip Shanghvi|
When Sun Pharmaceutical closed its $4 billion deal for Ranbaxy Laboratories, Sun founder and Managing Director Dilip Shanghvi said that the melding of the two companies would be done with a minimum of layoffs. But "minimum" doesn't mean none, and another of the 150 top executives that have reportedly been targeted has just exited.
The most recent is Rajeev Sibal, who led Ranbaxy's India operations, the Economic Times reports. The newspaper says Sibal is expected to join Lupin to oversee the competitor's India and emerging markets operations. Sibal's exit follows the departure last month of at least 18 execs, including Ranbaxy President and CFO Indrajit Banerjee and VP of marketing Maninder Singh. Even before the deal closed several top Ranbaxy execs in the U.S. departed to form a consulting firm.
Shanghvi, who was always expected to put his imprint on Ranbaxy, has said Sun will be able to cut about $250 million in costs in three years from the combined operations. Sun is known for running a leaner operation than Ranbaxy and is said to be looking to flatten out the management structure, even at some of Ranbaxy's manufacturing sites, the Economic Times said.
It was problems at Ranbaxy manufacturing operations in India that got the company into deep issues with the FDA, leading to warning letters and a consent decree that have impeded Ranbaxy's ability to launch new products and generate new revenue. The FDA this year pulled Ranbaxy's 180-day exclusives for generics of AstraZeneca's ($AZN) heartburn drug Nexium and Roche's ($RHHBY) antiviral Valcyte, both blockbusters, because of its ongoing manufacturing problems.
Sun has pledged to methodically improve the four plants and return them to the good graces of the FDA. More than cost-cutting, Shanghvi has said that getting those four plants producing for the U.S. market is the upside for Sun. The merger has already turned Sun into a major force, advancing its place as India's largest drugmaker and the fifth-largest generic company globally with combined sales of $4.2 billion.
- read the Economic Times story
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