Ranbaxy scrambles to fix problems that challenge its exclusives

Ranbaxy Laboratories still has a list of lucrative knockoffs on its tarmac that face launch challenges from its FDA regulatory entanglements. That is putting pressure on its finances and those of parent Daiichi Sankyo. So in an effort to get itself into a place where it can again ship from its FDA-approved plants in India, the drugmaker says it is taking a hard look at how it runs its API operations.

The Indian drugmaker reported to the Bombay Stock Exchange today that it had halted production at plants in Toansa and Dewas, two facilities already banned from exporting to the U.S., as part of an assessment of all of its API operations. Ranbaxy said it will resume production when it is satisfied it has its "processes and controls" in order. It also said that its board formed a new "Quality & Integrity Committee … to assure good governance to all Ranbaxy stakeholders."

It is not unusual for drugmakers to stop production while they do major upgrades at a facility, and many plants, including in the U.S., have done just that after the FDA has handed them a list of issues that need addressing. But while those plants were unable to ship to the U.S., they have been producing products for the Indian and European markets, Reuters reports.

Toansa also figures into Ranbaxy's plans for copies of two blockbusters, but the FDA put an import alert on the facility in January after it was found to be manipulating test data. The plant manufactured the API the drugmaker would use to produce its exclusive generic of Novartis' ($NVS) blockbuster blood pressure medicine Diovan, a launch that has already been delayed in the U.S. since September 2012. Toansa would also have produced the API for a launch of a generic of AstraZeneca's ($AZN) stomach drug Nexium when it goes off patent in the U.S. this spring. The drugmaker has reportedly been shopping for APIs from other companies. That might allow it to get generics of those drugs ready for a U.S debut but would trim the margins significantly off its profits from their sales. That would still be better than nothing.

The drugmaker has already seen its earnings swing to a loss, and unless it gets its problems with the FDA patched up, its future profits will be deeply restricted and by extension, so will the finances of parent Daiichi Sankyo. The Indian drugmaker did not say today whether Daiichi Sankyo had recommended the latest actions, but Daiichi CFO Manabu Sakai insisted last month that the Japanese drugmaker would do whatever was needed to get Ranbaxy's facilities in line with FDA expectations. He said that while it had already devoted a lot of effort to getting Ranbaxy straightened out, new "drastic measures" were in store.

- here's the statement
- read the Reuters story