The US government's legal move against Ranbaxy for allegedly selling adulterated drugs in the US could expose the company to an investigation back home too, Business Week had recently reported.
Concerned whether shareholders in the company were kept in the dark about potential risks or were given a rosier picture of the state of affairs, the Indian government is set to examine the charges levelled by US authorities and the company's statutory documents, the magazine had said.
Only recently Ranbaxy had sealed a multi-billion dollar mergel deal with the Japanese MNC Daiichi Sankyo.
If the company's documents show that the drug-maker has not taken its shareholders into confidence about the risks involved, a full-fledged investigation into the affairs of the company would follow. "We are keeping close tabs on the developments and would look into this issue," said a top government official.
Whatever might happen in the future, right now Ranbaxy remains firmly as the market leader in retail sales in India, with a share of 5.2% for the April-June quarter. It also maintained the top slot in each of the past three months, with a share of 5% in June, higher than last year's market leader Cipla's share of 4.9% during the same month.
During the April-June quarter, Cipla occupied the second slot with a share of 5.1%, growing by 9%. While Ranbaxy registered the highest growth of over 18% during the quarter, while in June alone, it had a growth of over 15%, reports Rupali Mukherjee in Times of India.
One of the major growth drivers during the second quarter was the sale of anti-infective drugs, which registered a huge spurt due to the "freak" weather conditions — a short winter and an early onset of rains in the north.
The primary growth drivers for anti-infectives were semi-synthetic penicillins (such as ampicillin, amoxycillin), quinolones and highend injectables. "A shorter winter season coupled with an increase in the incidence of viral infections where anti-infectives have led to the boost in the growth of these segments, and for Ranbaxy", a company official said.
Companies that have a strong portfolio of anti-infectives got a leg-up in sales during the period, industry experts say.
Ranbaxy Laboratories, Dr Reddy's Laboratories and Cipla Ltd have seen export sales surge on generic versions of brand-name drugs after the expiry of patents, a recent survey by Reuters showed.
The survey found net profit at Ranbaxy, India's largest drugmaker by sales, more than doubled to Rs 1.07 billion ($21.9 million) in the latest quarter compared with a year earlier, on a 34 per cent rise in sales to Rs 6.67 billion.
Analysts said Ranbaxy's profits have been driven by sales of a generic version of GlaxoSmithKline's antibiotic Ceftin.
Ranbaxy has gained a 50-55 per cent market share in the United States for the drug since March after winning a patent battle with GlaxoSmithKline, analysts say. Analysts said Ranbaxy's bottom line could be bolstered by a $6.3 million upfront payment received for licensing its prostrate drug to Germany's Schwarz AG.
Cipla's exports, which have surged in recent quarters, show signs of continuing the trend, analysts said. "Cipla's exports are rising because it is expanding its markets for bulk drugs," said C Srihari, analyst with Khandwala Securities.
The company has forecast exports will cross Rs 6 billion this year from Rs 4.96 billion last year.