Ranbaxy Labs recouped from the lower levels on Tuesday after the company announced the launch of a next generation anti-retroviral.
Even so, the scrip of the domestic pharma major failed to sustain its higher level of Rs 655. At the current juncture, it was trading higher by 1.3% to Rs 649.60 on BSE. It had earlier recovered from the day's low of Rs 632.
Ranbaxy Laboratories has been a firm feature of the market of late on the back of strong Q4 ended 31 December 2002 results. Also, the company's focus on the US generics market has held it in good stead. The scrip currently trades at close to a multi-year high (Rs 650.20 on 21 January 2003).
The scrip today surged following the company's announcement of a next generation anti-retroviral product, Abacavir, for the first time in India. The product, a bio-equivalent of the innovator brand, will be marketed in India under the brand name Virol, as a 300-mg tablet formulation.
Abacavir belongs to the class of ARVs called Nucleoside Reverse Transcriptase Inhibitors and is prescribed in the dosage of 300 mg twice a day. The product will be used in combination with other ARVs such as NRTIs protease inhibitors and/or non-nucleoside reverse transcriptase inhibitors. Abacavir based regiments effectively reduce HIV RNA in both treatment naive and treatment experienced patients and have the added advantage of sparing other classes of antiretroviral drugs for subsequent use. Resistance to Abacavir develops relatively slowly. Virol used in combination with Virocomb (Lamivudine+Zidovudine combination from Ranbaxy), extends the clinical usefulness of current treatment options to a longer period.
Commenting on the launch Malvinder Mohan Sing, regional director - India, RLL said, "Virol further strengthens Ranbaxy's growing anti-HIV product portfolio. The product will be a useful tool for HIV specialists who are constantly looking for ways to counter the problem of drug resistance with ARVs".
At an analyst meet held on 21 January 2002, RLL said it would increase its R&D spending by about 60% over the next five years. It would continue to push its key generics business, but plans to diversify into the specialty segment in the medium term and new drug research in the long term.
The global generic business of the pharma major stood at $40 billion in 2001 and is expected to rise to $95 billion by 2005. The US operations have accounted for 44% of its turnover in 2002, which is expected to rise to 47% by 2004 and 49% by 2005. The contribution from the European operations is expected to remain steady at 23%.
However, in the US, generic products are witnessing tremendous price erosion and competition. In the first quarter of the current fiscal, the company has launched amoxicillin, clavulanate potassium (augmentin) and will launch isotretinoin (Accutane).
In new drug discovery research, the pharma major will focus on the urology, anti-infective and pulmonary segments.
RLL reported a 45% rise in sales to Rs 776.45 crore (Rs 7.76 billion) in the quarter ended 31 December 2002 over the corresponding previous quarter. The spectacular rise in sales was on account of a 77% rise in exports (inclusive of trade discounts) to Rs 547.10 crore (Rs 5.47 billion). On the other hand, domestic sales grew by a modest 0.5% to Rs 261.70 crore (Rs 2.61 billion). Net profit balooned 323% in Q4 to Rs 212.70 crore (Rs 2.12 billion).
At the current Rs 649.60, RLL trades at a PE multiple of 22 based on its full year December 2002 EPS of Rs 29.40.
BSE Code: 500359
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