Ranbaxy Laboratories Ltd rose in Mumbai trading after it managed to get the approval of the U.S. to start manufacturing a generic version of the blood pressure drug Diovan that is originally made by Novartis AG. This happens about two years after the 3.5-billion-dollar patent protection of the medicine was lost.
In May, Mr. Arun Sawhney who is the current Chief Executive Officer of Ranbaxy Laboratories, shared his confidence that the company would be able to benefit from the exclusive marketing opportunities.
Winning the approval to produce the generic version of Novartis Diovan is expected to help the India-based company to improve its prospects after facing long-term problems with the regulatory authorities. Diovans version of Ranbaxy Laboratories had been delayed for a couple of years. Originally, its production was scheduled for late 2012, but was cancelled due to some problems with the factory that was engaged in the medicine manufacturing.
Now the U.S. Food and Drug Administration has allowed the Indian company to release a cheaper copy of the medicine. In the process of getting regulatory approval for the drug production, Ranbaxy became subject to a 3.2-billion-dollar acquisition by Sun Pharmaceutical Industries Ltd.
One of the analysts, who work at Geneva-based Helvea – Odile Rundquist wrote in a note, which was cited by Bloomberg that Diovans generic version of Ranbaxy Laboratories Ltd “had been highly expected for almost two years”.
After getting exclusive rights to copy Novartis Diovan for the first six months of the generic period of the drug, the shares of Ranbaxy Laboratories rose by 5.2% to 497.5 rupees yesterday. Some analysts consider the company will be able to generate 190-million-dollar sales over the 190 days of the exclusive rights to market the drug.
Ranbaxy Laboratories Ltd was 5.17% up to close at 497.55 Indian rupees per share yesterday, marking a one-year change of +56.12%. According to the information published on the Financial Times, the 29 analysts offering 12-month price targets for Ranbaxy Laboratories Ltd have a median target of 477.00, with a high estimate of 600.00 and a low estimate of 244.00. The median estimate represents a 0.82% increase from the last price of 473.10.
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