Ranabxy dwindled 3.09% to Rs 621.90 as the market reckoned that there may not be any positive developments in the company in the short term.

By 13:30 IST, the scrip of the largest domestic pharmaceuticals company in terms of market capitalisation came off the day's high of Rs 645. Over 200,000 Ranbaxy Laboratories shares were traded on BSE by 13:30 IST. The scrip has now lost 9.5% from Rs 686 on 6 May 2003.

Funds are moving out of the RLL counter as they find the near term prospects of the company in terms of new achievements lacklustre. Notably, banking stocks are gaining out of the disenchantment over RLL. Evenso, RLL is known to have strong fundamentals. However, it faces challenges in the domestic market due to its significant exposure to stagnating therapy areas, limited flexibility in pricing and increasing competition.

Though the company has 33 pending approvals, no visibility is seen regarding the size of the pending molecules as well as over the time-frame of their approvals. Considering these factors, the growth of Ranbaxy looks limited in the current year, according to analysts.

Last week, the export-focused Indian drug maker announced that it received tentative approval from the Food & Drug Administration, USA for manufacturing and marketing Fluconazole tablets, 50mg, 100 mg, 150mg and 200 mg, therapeutically equivalent to the reference listed drug Diflucan tablets of Pfizer Central Research.

Diflucan is indicated for the treatment of vaginal candidiasis, oropharyngeal and esophageal candidiasis and cryptococcal meningitis.

Last month, RLL had secured a tentative approval from the US FDA to market a generic form of Bristol-Myers Squibb's anti-depressant Serzone (Nefazodone Hydrocholride tablets) in 50 mg, 100 mg, 150 mg, 200 mg and 250 mg dosages.

There were also recent reports that RLL had received approval to market Flecainide Acetate Tablets USP, in 50 mg, 100 mg, and 150 mg strengths in the US. RLL's Flecainide Acetate tablets are bio-equivalent and, therefore, therapeutically equivalent to the listed drug, Tambocor™ tablets, of 3M Pharmaceuticals, Inc.

The recent wins follow a string of approvals in the US, boosting the company's stature as the No. 1 Indian drug exporter to the US and other markets. The company had earlier got permission to market Cefadroxil powder for oral suspension USP in 125 mg /5 ml, 250 mg/5 ml and 500 mg/5 ml strengths. In mid-March 2003, RLL got clearance to market Amoxicillin and Clavulanate Potassium for oral suspension, which is indicated for the treatment of infections caused by susceptible strains of the designated organisms in conditions like lower respiratory tract infections, otitis media, sinusitis, skin and skin structure infections, and urinary tract infections.

RLL has been aggressively pursuing the US generics market. The American operations accounted for 44% of its turnover in 2002. This is expected to rise to 47% by 2004 and 49% by 2005. The contribution from the European operations is expected to remain steady at 23%. However, in the US, generic products are witnessing tremendous price erosion and competition.

At an analysts meet held on 21 January 2003, RLL had said that it will continue to push its key generics business, but it also plans to diversify into the speciality segment in the medium term and new drug research in the long term.

In new drug discovery research, the pharma major has decided to focus on the urology, anti-infective and pulmonary segments.

For Q1 ended 31 March 2003, on a standalone basis, Ranbaxy registered a massive 195% rise in net profit to Rs 279.8 crore (Rs 2.79 billion) compared to Rs 94.9 crore in the corresponding period in the previous year. Net sales increased by 94% to Rs 1,024.9 crore (Rs 10.24 billion) from Rs 528.9 crore (Rs 5.28 billion).

BSE code: 500359