Ranbaxy Labs - Reported to in a pact with MNC for Diovan - Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP-Research, Pharma, Angel Broking)

Ranbaxy Labs - Reported to in a pact with MNC for Diovan:

"Ranbaxy Lab, though not confirmed is said to have partnered another multinational pharmaceuticals company for sourcing active pharmaceutical ingredients, or API, for the generic version of anti-hypertension drug Diovan. It has been said that the company had already filed an application with the US regulator, seeking permission for the partnership.

Despite the delay in seeking an approval from the regulator, has maintained it retained 180-days of exclusive marketing rights for the drug in the US. Though joining hands with another firm for sourcing API may help Ranbaxy get the long awaited permission for selling generic version of Diovan in the US along with securing exclusively rights for 180-days, it would also mean the company may have to share profits and/or make a one-time payment to its partner. The total US market for Diovan, a patented product of Novartis AG, is estimated at around US $1.5bn annually. If Ranbaxy gets the approval for its generic version of the drug, with the subsequent 180-days of sole marketing rights, it will be the only generic player. During those six months, it could earn revenue of US$187mn, but on account of profit sharing the net profit could be lower- around US$50mn. We maintain our neutral stance on the stock."

Source : Equity Bulls

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