37718674 Ranbaxy Laboratories Project

8/8/2019 37718674 Ranbaxy Laboratories Project

1/21

Ranbaxy LaboratoriesDemand Forecasting and TurnaroundStrategies

Company Details, Business Overview, Trading, Acquisitions, Allegations,

Forecasting Demand, Conclusion and Recommendations

2009

Amity Global Business School, Hyderabad11/18/2009

AKSHITA GUPTA (A30601909001)

M.VENKAT RAJU (A30601909019)

BIPIN KUMAR SINGH (A30601909021)

A.VENKATA SURESH (A30601909040)

NANDITA SADANI (A30601909048)

G.ANUSHA (A30601909049)

ROHIT REDDY (A30601909051)P.V.S.SANJEEV KUMAR (A30601909057)

MBA -2011 1st

SEMESTER


2/21

Amity Global Business School, Hyderabad 1 | P a g e

CONTENTS

1. INTRODUCTIONi) FORMATIONii) COMPANY PROFILEiii)WORKING DETAILS

2. BUSINESS 0VERVIEW3. BUSINESS AND FINANCIAL METRICS

(1)REVENUE VS PROFIT 2004-2008(2)PERFORMANCE HIGHLIGHTS(3)BUSINESS PERFOMANCE(4)DEVELOPED MARKETS(5)EMERGING MARKETS

4. DEMAND FORECASTING: FY20105. TRADING6. TURN AROUND STRATEGIES

(1)ACQUISITIONS(2)SHARE HOLDING PATTERN

7. KEY TRENDS AND FORCES8. LATEST DEVELOPMENTS: AT A GLANCE9.

COMPETITIONS

10. SUGGESTIONS/ RECOMMENDATIONS


3/21


Ranbaxy Laboratories Ltd. is a research based International pharmaceutical company

with its headquarters in India. It manufactures a range of high quality, affordable generic

drugs. The company has manufacturing facilities in around 9 countries. It has strong

presence in around 49 countries, products available in around 125 countries globally. It has

dedicated workforce of about 10,500 employees representing 51 different countries.

Formation:

Ranbaxy was started by Ranbir Singh and Gurbax Singh in 1937 as a distributor for a

Japanese company Shionogi. The name Ranbaxy is a portmanteau word from the names of

its first owners Ranbir and Gurbax. Bhai Mohan Singh bought the company in 1952 from his

cousins Ranbir Singh and Gurbax Singh. After Bhai Mohan Singh's son Parvinder Singh join ed

the company in 1967, the company saw a significant transformation in its business and

scale. His sons Malvinder Mohan Singh and Shivinder Mohan Singh sold the company to the

Japanese company Daiichi Sankyo in June 2008.

Ranbaxy was established in 1961 and went public in the year 1973. It has global sales

of US $1340 million for the year ended on 31st December, 2006. It has the largest market in

USA (sales appx. US $380 million); then come Europe and BRICS (Brazil, Russia, India, China,

South Africa).

Company Details:

Type - Public

Founded - 1961

Headquarters - Gurgaon, Haryana, India

Employees - 1100 in R&D

Website - www.ranbaxy.com


4/21


Working Details:

Ranbaxy has a strong R&D competence that provides a sustainable competitive

advantage to the company. It has scholarly pool of about 1100 scientists, engaged in out -of-

box researches. Ranbaxy spends over 7% of its sales on R&D. Licensing of once-a-day

Ciprofloxacin formulation, using NDDS (Novel Drug Delivery System) on a worldwide basis,

was the first international success for the company.

Ranbaxy is focused on Discovery and development of drugs on anti -infectives,

urology, respiratory/ inflammatory and metabolic diseases.

Top 20 Molecules: Simvastatin AmoxiClav Potassium Isotretinoin Amoxycillin and Combinations

Ciprofloxacin and Combinations Ketorolac Tromethamine Omeprazole and

Combinations

Cefuroxime Axetil Cephalexin Loratadine and Combinations Clarithromycin

Ginseng+Vitamins

Diclofenac and Combinations Ranitidine Cefaclor Cefpodoxime Proxetil Efavirenz

Atorvastatin and Combinations Fenofibrate Ofloxacin and Combinations


5/21


Business Overview

Ranbaxy Laboratories Limited encompasses the entire pharmaceutical value chain

from manufacturing to marketing generic pharmaceuticals; value added generic

pharmaceuticals, branded generics, Active Pharmaceuticals Ingredients (API) and

intermediates. As a research driven company, over 6% of it's revenues are invested in R&D,

amongst the pharmaceutical companies in India, Ranbaxy has the largest R&D budget with

an R&D spend of over US $ 100Mn. In 2008 it demerged its New Drug Discovery Research

division into a separate entity, Ranbaxy Life Science Research Limited (RLSRL).

The company has manufacturing operations in eight countries with a ground

presence in 49 countries, and its products are available in over 125 countries. It has been

aggressively entering into joint ventures and strategically acquiring companies in past few

years. Besides concluding its acquisition of Be-Tabs in South Africa, which makes Ranbaxy

the 5th largest generic pharmaceutical company in South Africa, the Company acquired 13

Dermatology products from Bristol-Myers Squibb in the USA in 2007. Ranbaxy made an

acquisition of RPG Aventis, France which has since been renamed as Ranbaxy Pharmacie

Generiques SAS. It also has subsidiaries in Spain, Netherlands, Russia and Australia.

Anti-infectives amoxycillin, ciprofloxacin, and simvastatin are in Ranbaxy's top selling

class of medications. In 2007, the company entered the specialty and niche therapeutic

areas of Bio-generics, Oncology,Penems, Limuses, Peptides,etc. The company also has a

groundbreaking anti-malarial candidate in late-phase trials.

Business and Financial Metrics

Revenue versus Profit after tax from 2004-2008From FY2004 to FY2008, sales revenue grew from Rs. 36,143.4 millions to Rs.

44,814.3 millions. The net profit for the same period increased from Rs.2,237 millions to

Rs.6,177.2 millions. From FY2007 to FY2008 the sales revenue increased from Rs.41,844.9

millions to Rs.45857.80 million. However, the company reported a net loss of Rs (10323.34)

million for FY 2008 compared to net profit Rs 6177.20 million for FY2007.

In Q3'08 Consolidated Revenue was Rs. 18,884 Mn (USD 431 Mn) against Rs.16,520

Mn in Q3'07, exhibiting a growth of 14.3%. The growth was due to the weakening in Rupeeagainst US Dollar and sales growth which was 6% in dollar terms at $428mn. Sales were

hindered by an import ban imposed by the U.S. Food and Drug Administration (FDA) on 30

different generic drugs imported from its Dewas and Batamandi (Paonta Sahib) Facilities.

With the import ban coupled and with a forex hedging loss worth Rs 900mn, their operating

margin fell to 7.8% in Q3'08 from 16.0% in Q3'07. The resultant operating profit stood at Rs

1440mn as against 2,831 mn in Q3'07, down by 49.1%. The provision for inventory write offs


6/21

Amity

B siness Sc y e 5 |

e

e to the import alert iss e by the US F A and due to the fore translation loss have

resulted in net loss of Rs3945mn against a net profit of Rs2074mn in Q3 07

Annual Sales : 5years at a GlanceYear 2004 2005 2006 2007 2008

Sales 36 143 4 35 366 5 40 587 1 41 844 9 44 814 3

Profit/Loss after TaxYear 2004 2005 2006 2007 2008

PA!

5 " 284 # 7 2 " 237 # 0 3 " 805# 4 6 " 177 # 2 10 " 448 # 0

Fi$

ure 1

0% 00

5 & 000 ' 00

10& 000' 00

15( 000% 00

20& 000' 00

25& 000' 00

30( 000% 00

35& 000' 00

40( 000% 00

45( 000% 00

2004 2005 2006 2007 2008

Chart Title

Sales Profit


7/21

Amity Global BusinessSchool, Hyderabad 6|P a g e

Quarterly Closings in 2009

Quarter Q109 Q209 Q309

Sales 8,022) 21 10,099 ) 18 11,937 ) 67

Quarter Q109 Q209 Q309

PAT 7,777) 78 6,754) 50 1,860) 67

Fi0

ure 2

01 00

2,0001 00

4,0001 00

6,0001

00

8,0001 00

10,0001 00

12,0001 00

Q109 Q209 Q309

Sales

PAT


8/21


Performance HighlightsNet Sales de-grew by 3.7%: For 1QCY2009, Ranbaxy posted Net Sales of Rs1,554.5cr,

a de-growth of 3.7% yoy, which was in line with our estimates. Net Sales declined on

account of USFDA issues in the US and challenging environment in the EU region. In the EUregion and North America, the companys Sales fell by 14% and 7% in Rupee terms to

Rs283.1cr and Rs404.0cr. However, Emerging market Sales fell marginally by 2% to

Rs837.6cr. The company has stated that it is in discussion with the USFDA to resolve the

issues involving its plants. The USFDA inspection of Paonta and Dewas facilities is likely to

take place during the year. Also, the company does not expect the current USFDA issue to

impact its FTF settlements.

For CY2009, the company has guided for Top-line Rs7,000cr, a de-growth of 3% over

CY2008. The company 2 s guidance does not include any upside from the launch of Valtrex.

Ranbaxy is working on various synergies with Daiichi Sankyo, which includes launching of

products from the parent 2 s portfolio in India and other Emerging markets. Operating

Margins collapse: Ranbaxy reported Operating Losses of

Rs104cr as against a Net Profit of Rs225cr in the last corresponding period. Operating Losses

can be attributable to realised foreign exchange losses of Rs84.5cr, shifting of operations to

Ohm facility in the US post the ban of fresh imports from the company 2 s Paonta Sahib

facility and on-going overheads at Paonta Sahib and Dewas facilities. The company expects a

marginal sequential improvement in Operating Margins by restructuring costs.

Net Loss of Rs761cr: Ranbaxy reported a Net Loss of Rs761.3cr for 1QCY2009

primarily on the back of Rs1,046.1cr MTM losses on foreign hedges and FCCBs. The

company has stated it has around US $1.4bn hedges, which are long term in nature. For

CY2009, the company has guided for a loss of around Rs800cr provided that there is no

further Rupee depreciation and no a dverse impact from the USFDA front.

Y/E Dec (Rs cr) CY2007 CY2008 CY2009E CY2010E

Net Sales 6,641 7,222 6,450 7,517

% chg 10.5 8.7 -10.7 16.5

Reported Profit 774.0-

914.6-813.9 408.7

% chg 51.5 0 0 0

Adj Net Profit 554 440.6 -62 334.2


9/21


Business PerformanceFor the quarter, the company posted Net Sales of Rs1,554.5cr registering 3.7% yoy

de-growth. Emerging markets, which accounted for 54% of the company 3 s Total Sales, de-

grew by 2.0% to Rs837.6cr. Meanwhile, the Developed Markets de-grew by 6% to Rs608cr.For CY2009, Ranbaxy has guided for Sales of around Rs7,000cr and Net Loss of Rs800cr. The

company expects to break-even in 9MCY2009 provided there is no further Rupee

depreciation and adverse impact on account of USFDA. The guidance does not include any

upside from the launch of Valtrex. Ranbaxy is working with on various synergies with Daiichi

Sankyo, which includes launching products from the parent 3 s portfolio in India and other

Emerging markets.

Developed MarketsFor 1QCY2009, the North American region comprising the US and Canada posted 7% de-

growth to Rs404.0cr. The US market de-grew by 14% yoy to Rs340.1cr despite of rupee

depreciation primarily on account of the US ban on products from the Paonta Sahib facility.

During the quarter, the company received four ANDA approvals from the USFDA. Imitrex

was launched during the quarter in the US. The company is investing towards increasing its

manufacturing capacity at its Ohm facility. The company expects to begin supplying Nexium

API to Astra Zeneca by 4QCY2009.

Ranbaxy stated that it is in discussion with the USFDA to resolve issues at its plants. The

USFDA inspection of Paonta and Dewas facilities is likely to take place during the year.

Ranbaxy believes that supply from its Dewas facilities could start again if the USFDA finds

the plants GMP compliant post the inspection. The Canada market grew at a faster pace of57% yoy to Rs63.9cr and the company currently ranks seventh with a 4% share in the

Generic market.

In the EU region, the company recorded Sales of Rs283.1cr, a de-growth of 14% yoy

primarily on account of currency devaluation and channel de-stocking. Ranbaxy has adopted

a cautious view on the EU region with focus shifting to Profitability replacing its earlier

Volume-based approach. Further, it is reducing its fixed costs in the UK and Germany

market.

Emerging MarketsDuring 1QCY2009, the CIS region de-grew by 8% yoy to Rs86.5cr primarily on account of

currency devaluation and stringent credit management adopted by the company. The Asia-

Pacific region recorded Sales of Rs109.2cr growing at 9% yoy. In India, the company 4 s Sales

during the quarter stood at Rs325.8cr, a yoy growth of 9% as the company continues to

maintain its second rank in the domestic market with 4.8% marketshare. The company also

launched the first product Olvance from Daiichi 4 s product portfolio. The company also plans

to scale up Daiichi 4 s products in India and other Emerging markets.


10/21


Business Segments

There are three basic business divisions: pharmaceutical dosage forms, active

pharmaceuticals ingredients (API) and allied business which comprises of animal healthcare,

diagnostics and a range of other products. Of these, the pharmaceutical dosage formsdivision is the largest sector, accounting for two thirds of annual sales.

Dosage Form Sales (94% of total revenue) the dosage form sales grew from 91% of

global sales in 2006 to 94% of global sales in 2007. It comprises the majority of Ranbaxy 5 s

sales, including sales of generic pharmaceuticals, value added generic pharmaceuticals and

branded generics.

API (Active Pharmaceutical Ingredients & Others) (6%) Ranbaxy supplies API to

leading generic companies in more than 50 countries. The API division has in i ts portfolio

over 50 products covering a wide therapeutic range such as Cardio-vasculars, Anti-

infectives, Anti-ulcerants, Anti-diabetics, Anti-depressants, Anti-virals and others. In 2001

Ranbaxy identified Consumer Healthcare as its new business area with the launch of 4

brands: Revital, Pepfiz, Gesdyp & Garlic Pearls. During 2006, the business registered sales of

US $ 19 Mn registering a growth of 19%.


11/21


Demand Forecasting: FY 2009-2010

Ranbaxy 6 s total sales year wise is:Year Sales in Crores

2004-05 36,143.40

2005-06 35,366.50

2006-07 40,587.10

2007-08 41,844.90

2008-09 44,814.30

Graphical representation is given below:

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

45,000.00

50,000.00

2004-05 2005-06 2006-07 2007-08 2008-09

Sales in Crores


12/21


Ranbaxy7 s Profit/Loss Year wise:

Year Profit in Crores

2004 5,284.70

2005 2,237.00

2006 3,805.40

2007 6,177.20

2008 10,448.00

Graphical Representation is given below:

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

2004 2005 2006 2007 2008

Profit/Loss in Crores

8 r 9 fit/L 9 ss i@ A r 9 res


13/21


Comparison between years:

Financial Year Comparison(in Crores)

2004-05 Nil

2005-06 3,047.70

2006-07 -1,568.40

2007-08 -2,371.80

2008-09 -4,270.80

-5,000.00

-4,000.00

-3,000.00

-2,000.00

-1,000.00

0.00

1,000.00

2,000.00

3,000.00

4,000.00

2005-06 2006-07 2007-08 2008-09

Comparision (in Crores)

B C D E

arisiC F

(iF

B

rC

res)


14/21


Trend analysis:

The equation for the straight line trend is Y = a + bx ,

Where a G is an intercept, and b G shows impact of independent variable; the Y intercept and

the slope of the line are found by making substitutions in the following normal equations:

Y = a + b x

XY = a x + b x2

To calculate the demand forecasting, last 5years G Sales (in Crores) are to be taken.

YearsSales in

Rs.crores (Y)X X

2XY

2004-05 36,143.40 1 1 36,143.40

2005-06 35,366.50 2 4 70,733.00

2006-07 40,587.10 3 9 1,21,761.30

2007-08 41,844.90 4 16 1,67,379.60

2008-09 44,814.30 5 25 2,24,071.50

N=5 Y = 198756.20 X = 15 X2

= 55 XY = 620088.80

Substituting the above values in the normal equations:

198756.20 = 5a+15b (eq1)

620088.80 = 15a+55b. (eq2)

Solving the two equations:

a = 32,605.18 and b = 2,382.02.

THE EQUATION FOR STRAIGHT LINE TREND IS: Y = 32,605.18 + 2,382.02X


15/21


TREND VALUES AND ESTIMATE FOR THE YEAR 2010 IS AS FOLLOWS:

Y2005 = 32,605.18 + 2,382.02(1) 34,933.20

Y2006 = 32,605.18 + 2,382.02(2) 37,369.22

Y2007 = 32,605.18 + 2,382.02(3) 39,751.24

Y2008 = 32,605.18 + 2,382.02(4) 42,133.26

Y2009 = 32,605.18 + 2,382.02(5) 44,515.28

Y2010 = 32,605.18 + 2,382.02(6) 46,897.30

The Demand Forecast for the Year 2010 is Rs. 46,897.30 Crores.

TRADING

In 1998, Ranbaxy entered the United States, the world's largest pharmaceuticals

market and now the biggest market for Ranbaxy, accounting for 28% of Ranbaxy's sales in

2005.

For the twelve months ending on 31 December 2005, the company's global sales

were at US $1,178 million with overseas markets accounting for 75% of global sales (USA:28%, Europe: 17%, Brazil, Russia, and China: 29%). For the twelve months ending on

December 31, 2006, the company's global sales were at US $1,300 million.

Most of Ranbaxy's products are manufactured by license from foreign

pharmaceutical developers, though a significant percentage of their products are off-patent

drugs that are manufactured and distributed without licensing from the original

manufacturer because the patents on such drugs have expired.

In December 2005, Ranbaxy's shares were hit hard by a patent ruling disallowingproduction of its own version of Pfizer's cholesterol -cutting drug Lipitor, which has annual

sales of more than $10 billion. In June 2008, Ranbaxy settled the patent dispute with Pf izer

allowing them to sell Atorvastatin Calcium, the generic version of Lipitor(R) and Atorvastatin

Calcium-Amylodipine Besylate, the generic version of Pfizer's Caduet(R) in the US starting

November 30, 2011. The settlement also resolved several other dis putes in other countries.


16/21


On 23 June 2006, Ranbaxy received from the United States Food & Drug

Administration a 180-day exclusivity period to sell simvastatin (Zocor) in the U.S. as a

generic drug at 80 mg strength. Ranbaxy presently competes with the maker of brand-name

Zocor, Merck & Co.; IVAX Corporation (which was acquired by and merged into Teva

Pharmaceutical Industries Ltd.), which has 180-day exclusivity at strengths other than 80

mg; and Dr. Reddy's Laboratories, also from India, whose authorized g eneric version

(licensed by Merck) is exempt from exclusivity.

On 16 September 2008, the Food and Drug Administration issued two Warning

Letters to Ranbaxy Laboratories Ltd. and an Import Alert for generic drugs produced by two

manufacturing plants in India.

On 10 June 2008, Japan's Daiichi Sankyo Co. agreed to take a majority (50.1%) stake

in Ranbaxy, with a deal valued at about $4.6 billion. Ranbaxy's Malvinder Singh will remain

CEO after the transaction. Malvinder Singh also said that this was a strategical deal and not

a sell out.

On February 25, 2009 the U.S. Food and Drug Administration said it has halted

reviews of all drug applications including data developed at Ranbaxy's Paonta Sahib Plant in

India because of a practice of falsified data and test results in approved and pending drug

applications. "Investigations revealed a pattern of questionable data," the FDA said.

Turn Around Strategies

Acquisition

On June 11 2008, Daiichi-Sankyo acquired a 34.8% stake in Ranbaxy, for a value $2.4

billion. In November 2008, Daiichi-Sankyo completed the takeover of the company from the

founding Singh family in a deal worth $4.6 billion by acquiring a 63.92% stake in Ranbaxy.

The addition of Ranbaxy Laboratories extends Daiichi-Sankyo's operations - already

comprising businesses in 21 countries. For Ranbaxy, the deal frees up its debt and imparts

more flexibility into its growth plans. The combined company is worth about $30 billion.


17/21


Shareholding PatternIn November 2008, Japanese Pharma Daiichi Sankyo Company (4568-TO) completed

the takeover of the company from the founding Singh family in a deal worth $4.6 billion by

acquiring 63.92% stake in Ranbaxy.

Limited share holding pattern

Entity Percentage

Daiichi Sankyo Company (4568-TO)63.92%

General Public13.18%

Banks Fin. Inst. and Insurance9.57%

Private Corporate Bodies5.30%

FII's4.16%

Others 1.72%

NRI's/OCB's/Foreign Others 0.14%

Key Trends and Forces

Gaining First-to-File exclusive rights to a generic through patent challengesGeneric drug companies can challenge a patent's validity or argue that their version

doesn't infringe on the existing drug's patent even before patent expiration. The first

company to apply for FDA Approval for a generic, in spite of an existing patent, receives a

180-day period of exclusivity to produce and sell the generic version.

Ranbaxy has been filing more than 20 ANDAs to the U.S.Food and Drug

Administration (FDA) each year. The cumulative abbreviated new drug applications (ANDA)filings stood at 239 with 141 approvals as on December 31, 2007. The company has entered

into 3 independent litigation settlements with innovator companies, GlaxoSmithKline (GSK)

for Valacyclovir (Valtrex) and Sumatriptan (Imitrex) and with Boehringer Ingelheim / Astellas

Pharma for Tamsulosin (Flomax). It has one of the largest product pipeline in the US that

includes 18 potential First-To-File opportunities with a market size of around US $ 27 Bn, at

innovator prices.


18/21


Pricing Pressures in US & European generic markets affect Ranbaxy's revenueDue to an increase in number of pharma companies forging into the generics market,

there has been downward pricing pressure on generics in the U.S. The generics market in

Europe, which had become a safe haven for Indian pharmaceutical companies after

competition pulled down margins in the US, has come under pricing pressure too, especially

in countries like Germany, UK and France, the top three generics markets in the continent.

These countries have seen margins in the generics segment erode as much as 80-90%. The

pricing pressure has been adversely affecting revenue as both US & Europe occupy

Ranbaxy's majority market share. Due to continuing competitive and pricing pressures,

Ranbaxy's revenues dropped 6% to Rs 149.5 crore from the UK, France, Germany in the

quarter ended September 30, 2008.

Regulatory issues raised by regulators in various countries where Ranbaxy operatespose a risk to it's markets:

On September 16, 2008 the U.S.Food and Drug Administration (FDA) issued warningletters to Ranbaxy Laboratories Ltd., and an Import Alert for Drugs from Two Ranbaxy Plants

in India affecting over 30 different generic drugs and citing seriou s manufacturing

deficiencies. Following this the World Health Organisation (WHO) observed that several

inspections of Ranbaxy's Paonta Sahib site - in June 2008 - revealed noncompliance with

WHO good manufacturing practices standards.

Further, India's business daily Mint quoted the Canadian health ministry as saying a

"regulatory letter" was sent to Ranbaxy Pharmaceuticals Canada requesting an action plan

and a response to the FDA's move. Impending healthcare reforms in Romania, Ranbaxy's

largest market in EU, is leading to a delay in the government's product and price approvallist, and adding to uncertainty amongst customers and suppliers. The outcome of these

regulatory issues pose a risk to the company's image as global generic player as well a risk to

its markets worldwide


19/21


Latest Developments in Ranbaxy: At a Glance

Ranbaxy's sales in the key U.S. market fell 53% to $44 million in the third quarter

ended Sept. 30. Overall, its revenue from developed markets, including the U.S., dropped

30% to $109 million, primarily due to lower business from the U.S. Its consolidated net sales

were $356 million for the period.

Ranbaxy Laboratories has exited from Japan-based joint venture companyNihon

Pharmaceutical Industry.

Ranbaxy entered into an agreement with Nippon Chemiphar to form a joint venture

company Nihon Pharmaceutical Industry, in September, 2002. Now it has sold its stake to

Nippon Chemiphar for an undisclosed amount after an agreement that allowed Nippon

Chemiphar (NC) to buy Ranbaxy H s entire stake in Nihon Pharmaceutical Industry (NPI),

Ranbaxy Labs said in a filing to the Bombay Stock Exchange.

Both companies Nippon Chemiphar and Ranbaxy Laboratories held equal

shares in the joint venture. Following the transaction, NPI would become a wholly -owned

subsidiary of Nippon Chemiphar.

Nippon Chemiphar is a Japanese pharmaceutical company, involved in developing,

manufacturing and selling generics, in addition to proprietary products.

Ranbaxy Laboratories, has posted a net profit of Rs 116.6 crore for its third quarter

ended September, against a net loss of Rs 394.5 crore in the same period last year.

Ranbaxy Laboratories, India's top drugmaker by sales, will start supplying in

December or January a key ingredient to AstraZeneca for anti-ulcer drug Nexium.


20/21


Competition

The pharmaceutical industry is characterized by rapid advances in scientific

knowledge and ability to discover new drugs. The industry is therefore led by large

manufacturers and marketers of drugs investing heavily in research & development, having

clinical testing, marketing and distributing capabilities. Some of the main competitors of

Ranbaxy are:

y Sun Pharamceuticals Industires - It is No. 1 in India in speciality therapy areas likepsychiatry, neurology, cardiology, gastroenterology, diabetology and respiratory.It

has brands in 30 markets worldwide and also has a generic presence in the U.S. with

Caraco Pharm Labs, Sun Pharmaceutical Industries Inc (subsidiary).

y Cipla - Cipla is a leader in the domestic retail pharmaceutical market. It also exportsraw materials, intermediates, prescription drugs, over-the-counter products, and

veterinary products to some 180 countries around the wor ld.

y GlaxoSmithKline - It is one of the oldest pharma companies in India and with aturnover of Rs. 1500 crore is one of the market leaders(market share) in India with a

share of 6.2 per cent. Its main portfolios consist of anti- infectives, dermatologicals

and pain management drugs.

Dr. Reddy's Laboratories - It is a global pharmaceutical company with it's headquarters in

India and a presence in more than 100 countries.


21/21


RECOMMENDATIONS/SUGGESTIONS

y Marketing Strategies : Increase salesy Reduce R&D costs.y Opening own exclusive Retail Outlets.y Any Time Medicines (ATM).y Outsourcing by forming alliance with companies like Pfizer, which is the market

leader in drug manufacturing globally.

y Outsourcing saves a lot of money when done in countries like India as it has manyscientists and thus very cost effective.

y Forming local mergers with companies like Alkem laboratories which meet therequirements for forming an alliance with this company in terms of the drugs that

they manufacture.

y Tie ups with multimedia companies as they play a huge role in the marketing of theproducts which involves advertising, signboards etc.

y Come out with exclusive drugs to tackle epidemic diseases, like H1N1, Chikungunia.y Developing drugs for Cancer, Brain Tumor and AIDS.y Development of Hospitals: Fortis and expanding its centers.y Tie-ups with Government: Government Hospitals.y Exclusive Medical Representatives.

Documents

37718674 Ranbaxy Laboratories Project