Ranbaxy Laboratories Ltd has signed an agreement ending its three-year-old regulatory tussle with the US Food and Drug Administration (FDA). The drug major said that it has earmarked $500 million (nearly Rs 2,640 crore) to meet any potential civil or criminal liability in connection with the FDA’s investigation.
The settlement will allow the company to import drugs from its two plants based in India.
“Ranbaxy has committed to further strengthen procedures and policies to ensure data integrity and to comply with current good manufacturing practices,” a company statement said.
Ranbaxy, currently owned by Daiichi Sankyo of Japan, has seen a series of changes in the top management in the last couple of years.
The US drug regulator’s decision came just months after the company’s previous promoters Malvinder and Shivinder Singh sold their stake to the Japanese major in a $2.4 billion deal. While the deal was seen as one of the biggest in the pharmaceutical sector across the world, the ban proved to be a dampener for the Japanese drug maker.
Commenting on the development, Ranbaxy CEO and managing director Arun Sawhney said: “While we were disappointed by the conduct that led to the FDA’s investigation, we are proud of the systematic corrective steps we have taken to upgrade and enhance the quality of our business and manufacturing processes.”
Shares of Ranbaxy closed at Rs 407 on the BSE, up 2.9% from their previous close.
Meanwhile, in a statement Daiichi Sankyo said it has revised downward its annual earnings forecasts taking into account the $500 million provision indicated by Ranbaxy.
Further, the company’s board has decided to return part of their monthly remuneration. As per the statement, “the company’s board has decided to return part of their monthly remuneration,” which stands at 30% for representative directors for six months and 10% or 5% for directors for six months.
With inputs from PTI