Health Canada has sent a letter to Ranbaxy’s Canadian subsidiary requesting an action plan and a response to the US Food and Drug Administration’s (FDA) warning letter. The news resulted in another drop in Ranbaxy’s share value, taking it to its lowest for 18 months.
Across the Atlantic, the European Medicines Agency (EMEA) is not taking any action as there are no Ranbaxy products approved across the whole of the EU.
However, some individual member states are monitoring the situation. The German drug regulator, the Federal Institute for Drugs and Medical Devices (BfArM), said it will be more rigorous in scrutinising the drug marketing applications from Ranbaxy’s facilities at Paonta Sahib and Dewas, India.
Also, the UK’s Medicines and Healthcare Products Regulatory Agency (MHRA) has initiated lab tests of Ranbaxy products, in an effort to reassure the public. A similar process is underway in New Zealand, where a press conference was called by the health ministry to announce the initiative.
The testing programmes have been initiated despite the fact that the FDA “has no evidence of harm to any patients who have taken drugs made at the two facilities”.
Importation of 30 Ranbaxy products was blocked on the basis of “extensive deviations from US current good manufacturing practice (cGMP) requirements".
Citigroup believes that the FDA’s blockade will cost Ranbaxy up to $140m in revenues through 2009. This has led to the group changing its stock rating from “buy” to “sell”.
Daiichi awaits regulatory approval
Daiichi Sankyo’s offer to acquire 20 per cent of Ranbaxy’s common shares has been oversubscribed, although the company has not said by how much.
However, payment for the stock has been delayed for an unspecified time after Indian regulators moved the deadline from September 19.
This delay is because India's Cabinet Committee on Economic Affairs, which meets to review foreign takeovers over $130m, has not been held. After the Cabinet meets, Daiichi needs approval from the Reserve Bank of India.
The purchase of common shares is in addition to the acquisition of the 34.8 per cent stake in Ranbaxy, which Daiichi is buying from the Indian company’s founding family.