By Rumman Ahmed
BANGALORE—Drug maker Ranbaxy Laboratories Ltd. posted a five-fold jump in earnings for 2010, helped by gains.
The Indian company on Tuesday reported a profit of 14.97 billion rupees ($333 million) compared with 2.96 billion rupees for 2009. The latest results included a gain of 2.4 billion rupees from the sale of a long-term investment. Ranbaxy had a similar benefit of 533 million rupees in 2009.
Sales rose 16% to 85.35 billion rupees from 73.29 billion rupees.
Ranbaxy, a unit of Japan's Daiichi Sankyo /zigman2/quotes/207030186/delayed JP:4568 +0.50% Co., didn't provide quarterly numbers but analysts said the full-year figure indicated the company had a loss of about 980 million rupees for the fourth quarter. The loss followed several profitable quarters, despite regulatory issues in the U.S.
Ranbaxy Managing Director Arun Sawhney said in a conference call with analysts that the latest loss was a result of the company taking a goodwill impairment charge of $40 million.
Ranbaxy had reported three consecutive quarterly losses through the first quarter of 2009.
Ranbaxy shares closed 3.1% lower on the Bombay Stock Exchange.
The company said it expects to report sales, excluding any contribution from exclusive generic-drug sales, of about $1.87 billion this year.
Aarthisundari Jayakumar , an analyst at Alchemy Share & Stock Brokers Pvt. Ltd., said the sales forecast isn't a concern but that Ranbaxy's weak operating performance for the quarter was disappointing. He said Ranbaxy's quarterly operating margin was weak despite the company benefiting from exclusive U.S. sales of a generic version of Aricept, Eisai /zigman2/quotes/203064480/delayed JP:4523 +13.74% Co.'s treatment for Alzheimer's disease.
U.S. 2010 sales rose 80% to $600 million, helped by sales of generic Aricept as well as from a generic version of GlaxoSmithKline /zigman2/quotes/209463850/composite GSK +0.37% PLC's anti-herpes medicine Valtrex. The 180-day exclusivity period for the Valtrex version ended in May, but Ranbaxy continues to benefit from exclusive sales of the Aricept copy, which it put on sale in November.
U.S. revenue was offset by weakness in Europe, where sales rose just 1%, to $272 million.
Ranbaxy is gearing up for its exclusive U.S. sale of a generic version of Pfizer /zigman2/quotes/202877789/composite PFE -0.16% Inc.'s cholesterol-lowering drug Lipitor. The drug, one of the world's top-sellers, will lose patent protection in November.
Mr. Sawhney said the company is confident it will benefit from its exclusive generic-drug sales in the U.S. despite facing a sales ban on some products because of quality-control issues. The company said it is cooperating fully with the U.S. Food and Drug Administration and the Justice Department on outstanding issues, he said.
An appreciation in the value of the Indian rupee against the U.S. dollar helped Ranbaxy record foreign-exchange gains on outstanding loans and derivatives position last year.
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