Company Watch

Ranbaxy on the growth path

Our News Bureau - New Delhi

Ranbaxy Laboratories recently announced the acquisition of a generics company, Ethimed NV, in Belgium.

It is the company's intention to manage operations in the Benelux territories out of Ethimed in Belgium. The acquisition follows similar strategic moves by Ranbaxy, previously in the larger European markets, and will allow it to anticipate local market dynamics and capitalise on the changing business landscape in Benelux.

Commenting on the acquisition, Peter Burema the President of Europe, CIS, Africa and Latin America, Ranbaxy, said, "Ethimed offers Ranbaxy a ready and robust distribution network to exploit new product opportunities in the future."

The Belgium market is largely a branded, high priced market with increasing generic penetration.

The acquisition positions Ranbaxy favourably to capture a significant portion of this expanding market.

Moving to Italy

Ranbaxy also announced its plans of acquiring the unbranded generic business of Allen SpA, a division of GlaxoSmithKline (GSK), in Italy, through Ranbaxy's Italian subsidiary, Ranbaxy Italia SpA. The deal will come into effect from April 01, 2006.

Commenting on the acquisition, Malvinder Mohan Singh, CEO and MD, Ranbaxy Laboratories, said, "The Allen Generic product portfolio complements Ranbaxy's own pipeline of products for the Italian market."

Ranbaxy's Italian oper-ation, Ranbaxy Italia SpA, is currently engaged in filing Ranbaxy's portfolio of generic products with the Italian Health Authorities and plans to launch this portfolio over the coming years. Ranbaxy plans to launch its first product, 'Sertralina Ranbaxy', in May, 2006.

Eastwards to Romania

In yet another move, Ranbaxy Laboratories and Terapia SA (Terapia) of Romania announced that they have signed a definitive agreement providing for the acquisition of Terapia by Ranbaxy. The deal will combine the strengths of the two premier generic companies and will allow Ranbaxy to leverage its expanded base in the rapidly growing Romanian pharmaceutical market across the European Union and the CIS markets.

Commenting on the acquisition, Mr Singh said, "Within the Ranbaxy fold, the acquisition unleashes multiple synergies of product development, product flow, low cost manufacturing, proximity and access to high growth markets and sound fundamentals, while being EPS accretive to the group immediately."

Ranbaxy gains access to Terapia's product basket of 157 marketing authorisations with a strong focus on the fast growing segments of CVS, CNS and musculoskeletal therapeutic segments. These presently comprise 71 percent of the company's domestic sales. Enalapril, Aspenter (Acetylsalicylic acid), Diurex 50 (Spironolacton + Furasemidum Combination) and Pentoxi retard (Pentoxiflin) are some of Terapia's successful products in the domestic market.

As a result of the acquisition, Ranbaxy will also be able to utilise the low cost manufacturing capacities of Terapia, comprising of two manufacturing sites, producing tablets, capsules, sterile ampoules and liquids. Though analysts felt the Terapia deal was not cheap, they say that, given the race to expand in Europe, higher prices would be the order of the day. "It is in line with the recent acquisitions," said Shahina Mukadam, analyst at IDBI Capital Markets. "It will give additional market share and revenues."

Ranbaxy said the acquisition would be reflected in earnings immediately, and its shares climbed three percent to Rs 409.75 in a firmer Mumbai market.