Ranbaxy Laboratories, the leading Indian pharmaceutical giant, suffered heavy setback during the first quarter ended March 2005 basically due to implementation of VAT, USA Quinapril litigation and the phasing of European first day launches. Further, in the USA market and pricing conditions remained soft. The company's consolidated net profit declined sharply by 62.9 per cent to Rs 70.8 crore from Rs 190.6 crore in the corresponding period of last year. This impacted its EPS adversely and declined to Rs 5.53 from Rs 12.34 in the preceding period. The consolidated sales also moved down by 13 per cent to Rs 1138 crore from Rs 1308 crore.

Commenting on the business results, Dr Brian Tempest, CEO and managing director, said "This was an unusual quarter for a variety of reasons but Ranbaxy strong pipeline of products which has now almost reached a 100 product approvals in the USA will take us through to a stronger performance in the second half of 2005."

The company's sales in US reached US$ 80 million as against Rs 105 million in the similar period of last year. Market conditions continued to remain soft and the company also had to discontinue sales of its generic product Quinapril to Teva, taking back all unsold stock from it. During the quarter, it received approval for 3 more ANDAs from the US FDA, taking the cumulative number of product approved to 99. The company also filed 5 ANDAs taking the cumulative product filings to 151 with 52 pending approval. The sales in Europe also declined to US$ 44 million as against $ 49 million in the corresponding quarter.

In India, the company's focus on chronic therapeutic segments showed positive results with the contribution of the chronic therapy portfolio at 20.5 per cent, up from 17.8 per cent. The contribution of NDDS to total Ranbaxy sales has also gone up to 5.9 per cent from 5.1 per cent. During the last 12 months (April-March 05) it launched 28 products with 8 in the dermatology, 7 in the gastrointestinal and 5 in the orthopaedic segments. The R&D expenses increased again on a quarter to quarter basis due to the further induction of scientific personnel (approx 150) and additional investments made in bio studies and generic filings.

The company recommended a final dividend of Rs 12 per share for the year ended December 2004, making a total dividend of Rs 17 per share. This will absorb an amount of Rs 360 crore. The Board also approved a stock split o the existing equity shares of the face value of Rs 10 each into shares with the face value of Rs 5 each, subject to necessary approvals of the shareholders at the forthcoming AGM.