Ranbaxy-Daiichi working on 3-yr plan for synergy

Ranbaxy Laboratories and its Japanese parent Daiichi Sankyo are working on a three-year plan for exploiting synergies in operations to enhance their generic as well as branded business across the globe.

Ranbaxy CEO and Managing Director Atul Sobti has said that the three-year plan was aimed at enhancing the value of both the companies with a focus on branded drugs, its back-end support, which includes research and development and marketing.

According to market analysts, there could be four key areas that the synergy plan between the two companies could address.

Accessing the Japanese market with Ranbaxy's products through Daiichi's network to cash in on the government's plan to double generic market share from the current $3.5 billion in the next few years is one of the key areas, a report by brokerage firm Motilal Oswal said.

The report also said Daiichi can also leverage on Ranbaxy's distribution network to launch its products, where a beginning has already been made in Romania and Mexico.

Asked about the time frame for announcing details of the three-year plan during a conference call for third quarter results on Monday, Sobti said the company expects it to be out by December this year.

Earlier this year, both companies have entered into an arrangement under which Ranbaxy would market the branded products from Daiichi Sankyo's portfolio in the markets where the Japanese firm did not have presence.

The Gurgaon-based company has recently launched Evista, a drug used for treating osteoporosis, through its subsidiary in Romania from Daiichi Sankyo's portfolio.

In Mexico, Ranbaxy has set-up a new marketing division to focus on Daiichi Sankyo¿s products and has reported a 38 per cent increase in sales in the third quarter of current year.

Besides this, Ranbaxy has also introduced some of Daiichi Sankyo's product in India.

"We continue to explore other collaborations with Ranbaxy that will help optimise our growth," Daiichi Sankyo President and CEO Takashi Shoda had said.

Daiichi Sankyo acquired majority stake in Ranbaxy Laboratories last year for about Rs 22,000 crore and currently holds 64 per cent share in the Indian company.