INDIA'S RANBAXY AND CIPLA ENJOY MIXED FORTUNES

Results for leading Indian generics producers Ranbaxy and Cipla give a mixed picture of performance in the third quarter of 2004. Ranbaxy reported an 11% decline in net profit in the quarter to INR1.57bn (US$35.80mn), while second-ranked Cipla has claimed a 66% rise in quarterly profit to INR1.26bn (US$28.75mn).

Nevertheless, Ranbaxy managed to consolidate its position in chronic therapy areas, and its US sales rose 19% to US$128mn, while European revenues totalled US$53mn, a growth of 139%. The company also claimed that it had allowed for write-off costs on HIV/AIDS treatments and its rofecoxib product line. Meanwhile, Ranbaxy is eager to point out that it has recently secured distribution deals with fellow leading generics producers Teva and Andrx, and has carried out a legally contested launch for Clarithromycin in the UK. The company has also filed three ARV filings under the US government's accelerated approvals procedure for the PEPFAR HIV/AIDS initiative, as well as filing 25 new products in EU reference member states.

Products offered by Cipla, meanwhile, have continued to perform strongly, although in its home market the company awaits authorities' decision on the possible inclusion of its salbutamol, theophylline, ciprofloxacin and norfloxacin lines within the country's list of price-controlled drugs.

Despite the apparently negative news, the key dividing line between Ranbaxy and Cipla remains Ranbaxy's recent aggressive moves into research-based drug development. Heavy research and development spending in the period was cited as a reason for the deterioration in results, as the company prepares to open a New Drug Discovery Research facility outside New Delhi. Ranbaxy has been swift to take account of new, more stringent patent legislation in India, while Cipla recently expressed doubts that its US$20mn discovery budget would remain competitive against those of multinational rivals.