Financial Daily from THE HINDU group of publications
Wednesday, Aug 17, 2005
Corporate - Mergers & Acquisitions
Ranbaxy eyes large-sized acquisitions Kalam inaugurates third R&D facility
R&D VISION: The President, Mr A.P.J. Abdul Kalam, with the President and Executive Director of Ranbaxy, Mr Malvinder Mohan Singh (extreme right), at the inauguration of the Ranbaxy Research & Development Centre III at Gurgaon on Tuesday. - Ramesh Sharma
New Delhi , Aug. 16
AFTER Israeli Teva Pharmaceutical Industries Ltd announced plans of acquiring Ivax Corporation, making it the largest generics company in the world, Ranbaxy Laboratories Ltd reiterated on Tuesday that it is also looking at growth through acquisitions.
It is open to buying out not only smaller companies but also those that are as large as it is.
Speaking to newspersons, Mr Malvinder Mohan Singh, President - Pharmaceuticals and Executive Director, Ranbaxy, said, "We want to be among the Top 5 companies before 2012. We are looking at acquisitions in the US, Europe and India. We are looking at the right synergy and product portfolio."
While stating that the company has not built a war chest for this, Mr Singh said that raising capital would not be a problem.
Talking about the acquisition of French RPG Aventis, he said that in the second half of the year, the first set of products developed and manufactured in India would hit the French markets. He said that this would bring significant cost benefits to Ranbaxy in the next few years.
The company is also looking at forging marketing alliances with other Indian companies wishing to tap the US markets. "We have the expertise in the US markets which we offer to other Indian companies," he added.
On the pricing pressures in the US markets, Mr Singh said that these are cyclical in nature. "The performance of Ranbaxy in the US markets could also improve with the launch of new products. This year, there were very few products that went off-patent. But in the next two years, several products are expected to move out of patent protection. We plan to take advantage of the 180-day exclusivity period."
On the litigations against Pfizer's Lipitor (atorvastatin: a cholesterol lowering drug), Dr Brian Tempest, CEO and Managing Director, Ranbaxy, said, "We are continuing to pursue the litigations. The hearings have concluded in the UK and we expect a decision soon, while we expect a judgment from the US Court by the end of this year." The company has, for the moment, ruled out an out-of-court settlement with Pfizer. In fact, it is tying up its raw material supplies for the product to service various markets.
The company's third research and development (R&D) centre was inaugurated by the President, Dr A.P.J. Abdul Kalam. In order to make a mark in the global scene, he said that Indian companies must focus on competitiveness.
While the two other R&D centres will focus on development of generics and novel drug delivery systems, the R&D Centre III is dedicated to new drug discovery research. The company's focus areas are infectious diseases, urology, respiratory/inflammatory and metabolic diseases. Ranbaxy is currently bullish about its new molecule for malaria that is likely to enter Phase II B trials soon.
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