India's Ranbaxy's Q2 profit down 25 %

Top Indian generic drugmaker Ranbaxy Laboratories on Friday reported a 25 percent drop in its second-quarter net profit, buffeted by US regulatory problems, but it still beat market forecasts. Net profit for the generic and branded pharma giant, which is controlled by Japan's Daiichi Sankyo, fell to 2.43 billion rupees ($54 million) for the three months to June 30 2011 from 3.26 billion rupees a year earlier. Analysts had forecast a near 40 percent slide in quarterly profit. "We have consciously worked towards strengthening our base business," Arun Sawhney, managing director of Ranbaxy, said in a statement. The group, based in Gurgaon near New Delhi, said results were helped by better performances in India, Europe, Africa and countries that were once part of the Soviet Union. But Ranbaxy, which has been hit by major regulatory problems in the United States, said consolidated sales grew just 1.09 percent to $461 million, from $456 million. US sales, its largest market, touched $95 million. The US regulator has accused Ranbaxy of falsifying data and test results in approved and pending drug applications, which it said could lead to defective products. The Indian company, which denies the allegations, said it "continued to cooperate" with the US Food and Drug Administration and the US Department of Justice "for a comprehensive solution to address its regulatory issues". "Negotiations with the regulators are progressing well," it added. Ranbaxy's shares on the Bombay Stock Exchange fell 2.51 percent to 520.4 rupees after the earnings announcement. Ranbaxy is in competition with its Indian rivals, Dr Reddy's Laboratories and Cipla, for a growing market for generic drugs as developed countries battle high healthcare costs.