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| Daiichi FY'09 loss at $3.45 bn on fall in Ranbaxy scrips |
| Press Trust of India / Tokyo/New Delhi May 12, 2009, 15:20 IST |
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Japanese drug maker Daiichi Sankyo today reported a loss of $3.45 billion during the financial year 2008-09, and said it was on account of a steep fall in share prices of Ranbaxy, which it acquired last year.
The company said it has booked 'extraordinary losses due to one-time write-down of goodwill' worth $3.59 billion on Ranbaxy shares, which have dipped more than two-thirds since the deal was signed in June last year.
Daiichi Sankyo, the third-largest drug maker in Japan, last year acquired controlling stake of around 64 per cent in Ranbaxy Laboratories for around Rs 22,000 crore.
"The Group posted a net loss of 335.8 billion yen (compared with net income (profit) of 97.6 billion yen ($1 billion) in the previous year) as the result of recording 351.3 billion yen in extraordinary losses due to one-time write-down of goodwill pertaining to the investment in Ranbaxy," Daiichi Sankyo said in a statement.
However, the Japanese company said it expects to return to black in the current year and end the fiscal with a profit of 40 billion yen ($409 million).
The company's sales in India and its neighbouring region during FY'08-09 grew by 69.4 per cent at 44.1 billion yen ($450 million). Ranbaxy alone contributed 21.1 billion yen ($215 million) in the overall sales of the company.
Meanwhile, sales in India were primarily driven by the launch of two drugs from Daiichi's international portfolio Olmesartan and Levolfloxacin, the company said.
The US FDA had imposed a ban in September last year on the import of 30 drugs manufactured by Ranbaxy at two of its plants located in India alleging violation of Good Manufacturing Practice. In February 2009, FDA invoked Application Integrity Policy (AIP) against the Paonta Sahib facility on charges of falsifying data and test records.
An AIP is invoked on concerns over the integrity and reliability of data required to be submitted for drug approvals. Then, the facility involved has to re-apply for the approval or withdraw the application.
"These regulatory actions could exert a significantly adverse impact on the group," Daiichi Sankyo said, and added that it has established a joint taskforce of Ranbaxy management and industry experts to resolve the issues.
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