India's Ranbaxy hit by new ban from US drug regulator

January 24, 2014 - 10:21:57 am

MUMBAI: Shares in one of India's biggest drugmakers, Ranbaxy Laboratories, dropped 17 percent on Friday after the US Food and Drug Administration suspended imports from a fourth manufacturing facility of the firm.

The FDA said it found significant violations from the expected "good manufacturing practice" requirements at Ranbaxy's Toansa factory in the northern state of Punjab.

The New Delhi-based drug manufacturer's stock tumbled to 346.20 rupees from its previous close of 417.15 on the Bombay Stock Exchange.

The Toansa plant makes so-called API active pharmaceutical ingredients for the company's drugs which include treatments for ailments including heart and nervous system disorders.

Toansa now joins the firm's Mohali plant and two other facilities which have been banned by the FDA, further locking out the company from one of its biggest markets.

Violations at Toansa included staff re-testing raw materials and drugs "after those items failed analytical testing and specifications in order to produce acceptable findings," according to the regulator.

The plant now becomes part of the FDA "consent decree" which means it cannot supply drugs for the US until the regulator reinspects the facilities and is satisfied that corrective measures have been taken.

"Appropriate management action will be taken after completion of the internal investigation," Ranbaxy said in statement posted on the BSE website.

Japanese drugmaker Daiichi bought Ranbaxy in 2008 believing its dominance in cheap generic medicines and developing markets would help the firm grow.

But the Indian company has been a weight on Daiichi's books ever since due to its regulatory problems.

Shares have fallen over 24 percent in the last 12 months. 

Daiichi paid 737 rupees per share in 2008, more than double their current level.

The US market traditionally makes up some 40 percent of Ranbaxy's sales. (AFP)

   

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