>Ranbaxy Laboratories (ANGEL BROKING)

Ranbaxy Laboratories - BUY
Event Update

Price: Rs170
Target : Rs277
Time : 12 months

*USFDA invokes AIP: The USFDA has invoked Application Integrity Policy (AIP) on Ranbaxy's Paonta Sahib facility citing that the company has falsified data and results in approved and pending ANDA filed from the facility. Prior on September 16, 2008, the USFDA had issued two warning letters and instituted an Import Alert barring entry of all finished drug products and active pharmaceutical ingredients (API) from Ranbaxy's Dewas, Paonta Sahib facilities due to violation of US current Good Manufacturing Practices requirements. That action barred commercial importation of 30 different generic drugs into the US and continues to be in effect. However, we expect this latest action by the USFDA to have limited impact on Ranbaxy’s US Sales as most of the approved drugs from this facility were already under the import ban list. Further, no other products from Ranbaxy's other manufacturing facilities are included in the AIP except products, which used clinical data from the Paonta facility.

* No Quality concerns: USFDA has however, clarified that it has no evidence that these drugs do not meet their quality specifications and has not identified any health risks associated with the currently marketed products from Paonta faicilities.

*No early resolution in sight: The latest USFDA action against Ranbaxy indicates that there appears to be no near-term closure to the investigation, and we believe it will continue over a longer period of time. However, Daiichi Sankyo and Ranbaxy have formed a team to resolve the issue. Notable, earlier this month, Ranbaxy had received approval for Imitrex from its Ohm facility in the US, which in our view was a positive development for it.

To see full report: Ranbaxy