Ranbaxy Restarts Atorvastatin Production

Gurgaon-based pharma company, Ranbaxy, has told the stock exchanges that it has restarted the production of the generic version of Lipitor (Atorvastatin) from its US manufacturing facilities. The company had voluntarily recalled the drug in November 2012 as minute glass particles were found in some batches.

The generic was launched in December 2011 and had been a huge revenue driver for the company in 2012. It is believed that the company roped in revenues in excess of USD 600 million (over Rs 3000 crore) from the drug in the first six months of exclusivity. The detection of the glass particles, however, was a big blow to its revenues. The company is yet to reports its December 2012 quarter revenues, and therefore, the exact financial impact is yet unknown. It however can be said that the revenues will remain very low due to the high base a year before and the Atorvastatin recall.

In the initial trades of the day, the shares of Ranbaxy were up nearly 4% on the news of the restarting of production. It remains to be seen when company will re-launch the drug. However, the recall has meant a setback to the company’s and its market share would have completely eroded. There are a few other manufacturers who have launched their generic versions, and hence, the sales of Ranbaxy’s drug may not be as robust as was seen in the June and September 2012 quarters.

The only positive for the stock would be that the restart of production may be seen by the market as a potential positive outcome for its two banned facilities.