Ranbaxy Laboratories Project
Ranbaxy Laboratories Project
Ranbaxy Laboratories Project
Ranbaxy Hyderabad
11/18/2009
Laboratories
Demand Forecasting and Turnaround
Strategies
Company Details, Business Overview, Trading, Acquisitions, Allegations,
Forecasting Demand, Conclusion and Recommendations
1. INTRODUCTION
i) FORMATION
ii) COMPANY PROFILE
iii)WORKING DETAILS
1. BUSINESS 0VERVIEW
2. BUSINESS AND FINANCIAL METRICS
(1)REVENUE VS PROFIT 2004-2008
(2)PERFORMANCE HIGHLIGHTS
(3)BUSINESS PERFOMANCE
(4)DEVELOPED MARKETS
(5)EMERGING MARKETS
1. DEMAND FORECASTING: FY2010
2. TRADING
3. TURN AROUND STRATEGIES
(1)ACQUISITIONS
(2)SHARE HOLDING PATTERN
1. KEY TRENDS AND FORCES
2. LATEST DEVELOPMENTS: AT A GLANCE
AKSHITA GUPTA (A30601909
3. COMPETITIONS 001)
4. SUGGESTIONS/ M.VENKAT RAJU
RECOMMENDATIONS (A30601909
019)
BIPIN KUMAR (A30601909
SINGH 021)
A.VENKATA (A30601909
SURESH 040)
NANDITA SADANI (A30601909
Formation:
Ranbaxy was started by Ranbir Singh and Gurbax Singh in 1937 as
a distributor for a Japanese company Shionogi. The name Ranbaxy is a
portmanteau word from the names of its first owners Ranbir and Gurbax.
Bhai Mohan Singh bought the company in 1952 from his cousins Ranbir
Singh and Gurbax Singh. After Bhai Mohan Singh's son Parvinder Singh
joined the company in 1967, the company saw a significant
transformation in its business and scale. His sons Malvinder Mohan Singh
and Shivinder Mohan Singh sold the company to the Japanese company
Daiichi Sankyo in June 2008.
Ranbaxy was established in 1961 and went public in the year 1973.
It has global sales of US $1340 million for the year ended on 31st
December, 2006. It has the largest market in USA (sales appx. US $380
million); then come Europe and BRICS (Brazil, Russia, India, China, South
Africa).
Company Details:
Type - Public
Amity Global Business School, Hyderabad
4|Page
Founded - 1961
Website - www.ranbaxy.com
Working Details:
Ranbaxy has a strong R&D competence that provides a sustainable
competitive advantage to the company. It has scholarly pool of about
1100 scientists, engaged in out-of-box researches. Ranbaxy spends over
7% of its sales on R&D. Licensing of once-a-day Ciprofloxacin formulation,
using NDDS (Novel Drug Delivery System) on a worldwide basis, was the
first international success for the company.
✔ Top 20 Molecules:
Figure 2
✔ Performance Highlights
For CY2009, the company has guided for Top-line Rs7,000cr, a de-
growth of 3% over CY2008. The company’s guidance does not include any
upside from the launch of Valtrex. Ranbaxy is working on various
synergies with Daiichi Sankyo, which includes launching of products from
the parent’s portfolio in India and other Emerging markets. Operating
Margins collapse: Ranbaxy reported Operating Losses of
Rs104cr as against a Net Profit of Rs225cr in the last corresponding
period. Operating Losses can be attributable to realised foreign exchange
losses of Rs84.5cr, shifting of operations to Ohm facility in the US post the
ban of fresh imports from the company’s Paonta Sahib facility and on-
going overheads at Paonta Sahib and Dewas facilities. The company
expects a marginal sequential improvement in Operating Margins by
restructuring costs.
✔ Developed Markets
✔ Emerging Markets
Business Segments
There are three basic business divisions: pharmaceutical dosage
forms, active pharmaceuticals ingredients (API) and allied business which
comprises of animal healthcare, diagnostics and a range of other
products. Of these, the pharmaceutical dosage forms division is the
largest sector, accounting for two thirds of annual sales.
Dosage Form Sales (94% of total revenue) the dosage form sales
grew from 91% of global sales in 2006 to 94% of global sales in 2007. It
comprises the majority of Ranbaxy’s sales, including sales of generic
pharmaceuticals, value added generic pharmaceuticals and branded
generics.
2004-05 36,143.40
2005-06 35,366.50
2006-07 40,587.10
2007-08 41,844.90
2008-09 44,814.30
Financial Comparison(in
Year Crores)
2004-05 Nil
2005-06 3,047.70
2006-07 -1,568.40
2007-08 -2,371.80
2008-09 -4,270.80
∑Y = a + b ∑ x
∑XY = a ∑x + b ∑x2
To calculate the demand forecasting, last 5years’ Sales (in Crores) are to
be taken.
Sales in
Years Rs.crores X X2 XY
(Y)
2004-
36,143.40 1 1 36,143.40
05
2005-
35,366.50 2 4 70,733.00
06
2006-
40,587.10 3 9 1,21,761.30
07
2007-
41,844.90 4 16 1,67,379.60
08
2008-
44,814.30 5 25 2,24,071.50
09
∑Y = ∑ X2 = ∑XY =
N=5 ∑X = 15
198756.20 55 620088.80
Y2005 32,605.18 +
= 2,382.02(1) 34,933.20
Y2006 32,605.18 +
= 2,382.02(2) 37,369.22
Y2007 32,605.18 +
= 2,382.02(3) 39,751.24
Y2008 32,605.18 +
= 2,382.02(4) 42,133.26
Y2009 32,605.18 +
= 2,382.02(5) 44,515.28
Y2010 32,605.18 +
= 2,382.02(6) 46,897.30
TRADING
In 1998, Ranbaxy entered the United States, the world's largest
pharmaceuticals market and now the biggest market for Ranbaxy,
accounting for 28% of Ranbaxy's sales in 2005.
On 23 June 2006, Ranbaxy received from the United States Food &
Drug Administration a 180-day exclusivity period to sell simvastatin
(Zocor) in the U.S. as a generic drug at 80 mg strength. Ranbaxy
presently competes with the maker of brand-name Zocor, Merck & Co.;
IVAX Corporation (which was acquired by and merged into Teva
Pharmaceutical Industries Ltd.), which has 180-day exclusivity at
strengths other than 80 mg; and Dr. Reddy's Laboratories, also from
India, whose authorized generic version (licensed by Merck) is exempt
from exclusivity.
Acquisition
On June 11 2008, Daiichi-Sankyo acquired a 34.8% stake in
Ranbaxy, for a value $2.4 billion. In November 2008, Daiichi-Sankyo
completed the takeover of the company from the founding Singh family in
a deal worth $4.6 billion by acquiring a 63.92% stake in Ranbaxy.
✔ Shareholding Pattern
General Public
13.18%
4.16%
FII's
Others 1.72%
NRI's/OCB's/Foreign Others 0.14%
Ranbaxy has been filing more than 20 ANDAs to the U.S.Food and
Drug Administration (FDA) each year. The cumulative abbreviated new
drug applications (ANDA) filings stood at 239 with 141 approvals as on
December 31, 2007. The company has entered into 3 independent
litigation settlements with innovator companies, GlaxoSmithKline (GSK)
Competition
The pharmaceutical industry is characterized by rapid advances in
scientific knowledge and ability to discover new drugs. The industry is
therefore led by large manufacturers and marketers of drugs investing
heavily in research & development, having clinical testing, marketing and
distributing capabilities. Some of the main competitors of Ranbaxy are:
RECOMMENDATIONS/SUGGESTIONS
• Marketing Strategies : Increase sales
• Reduce R&D costs.
• Opening own exclusive Retail Outlets.
• Any Time Medicines (ATM).
• Outsourcing by forming alliance with companies like Pfizer, which is
the market leader in drug manufacturing globally.
• Outsourcing saves a lot of money when done in countries like India
as it has many scientists and thus very cost effective.