Despite FDA bans on four Ranbaxy Laboratories plants in India, the drugmaker managed to realize a profit in the last quarter as its plant in New Jersey was able to come through for it.
Ranbaxy, which is set to be acquired by Sun Pharmaceuticals in a $3.2 billion stock deal, reported a profit of 4.78 billion rupees ($78 million) for the quarter ended September 30, Reuters reports. The drugmaker had reported a loss of about $73 million in the same quarter a year ago.
The company said that sales in India and Western Europe were up, but that finally getting its generic of Novartis' ($NVS) heart drug Diovan to market was the big factor. It didn't break sales of the drug out specifically but said revenues in the U.S. were about $221 million, driven by its 180-day exclusivity for that drug.
Diovan went off patent in September 2012, but the FDA wrote up warning letters and then banned the two plants in India where Ranbaxy had expected to produce the API as well as the finished product after inspectors found issues with its drug testing. That delayed the launch, but the FDA worked with Ranbaxy on moving production to its Ohm Laboratories plant in New Jersey, approving production there in June.
Ranbaxy has had years of manufacturing issues. It is operating under a consent decree with the FDA and the Department of Justice, and last year paid $500 million to settle litigation tied to its ongoing quality problems. Today's earnings report is a validation for the decision by Sun Pharmaceutical's owner, billionaire Dilip Shanghvi, who struck a $3.2 billion deal to buy Ranbaxy despite the years of FDA entanglements. He has said that the first order of business once the deal is completed is to work with Ranbaxy to get the FDA issues resolved so that its four banned plants will be able to sell in the U.S. again.
- read the Reuters story