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India’s Ranbaxy (NSE: RANBAXY.NS) Posts a Profit

Ranbaxy Laboratories Ltd. Tuesday posted a first-quarter consolidated net profit of 9.61 billion rupees ($213.2 million), compared with a net loss of 7.67 billion rupees a year earlier when it had a huge foreign-exchange loss. India’s largest pharmaceutical company boosted sales with foreign exchange gains, an exclusive sales contract with the U.S. of generic anti-herpes medication.

Chief Executive Atul Sobti said the spike in other operating income resulted from receiving $50 million from Germany's Boehringer Ingelheim GmbH as part of a patent litigation settlement over a generic version of Flomax, a drug used to treat an enlarged prostate gland.

The company is in a delicate position because of currency volatility, it has a high level of foreign currency billings and big overseas loans. It has to book losses when the Indian rupee falls against the U.S. dollar. The Indian rupee has risen almost 8% against the dollar during the past fiscal year.

The generic version of Valtrex, an anti-herpes medicine, which is actually valacyclovir hydrochloride has taken 60% of the market share in the U.S., and the "first-to-file" status—granted by the U.S. Food and Drug Administration—gives a generic drug maker a period of exclusive sales for their copycat versions of a medicine, helping it rake in profits before competitors launch their generic versions and push prices down.

Sales in the company’s U.S. market have tripled and shares closed 0.9% higher at 458.25 rupees on the Bombay Stock Exchange.
 


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