India's biggest drugmaker by sales, Ranbaxy Laboratories, has assured shareholders it is taking "stringent steps" to resolve a US ban on imports of medicines manufactured at its newly renovated showcase plant.
The US Food and Drug Administration (FDA) banned imports last week from Ranbaxy's "ultra modern" Mohali plant, whose renovation was supposed to mark a turning point for the Indian generics giant after years of run-ins with US regulators.
But now Mohali -- along with two other Ranbaxy plants placed earlier under bans -- are unable to ship to the company's key US market due to the FDA prohibition on imports for failing to meet "good manufacturing practices".
"Ranbaxy would like to assure all stakeholders we are taking stringent steps to address all (the FDA's) concerns," Ranbaxy chief executive Arun Sawhney told shareholders in a letter posted on the company's website.
Ranbaxy is 63.3 percent owned by Japan's Daiichi Sankyo, which bought the firm in 2008 believing its dominance in generic medicines and developing markets would help the Japanese firm grow sales as Daiichi's drugs came off patent.
It outbid rivals to buy Ranbaxy for $4.6 billion but its foray into the high-growth copycat drugs arena has brought the Japanese drugmaker only pain as the Indian firm has come under fire over a string of safety problems.
The latest ban came four months after Ranbaxy pleaded guilty to US felony charges of selling adulterated antibiotic, epilepsy and other drugs from the Dewas and Paonta Sahib plants -- which are still unable to supply the US market -- and paid a record $500 million fine.
The fraud involving the two plants was exposed by a whistle-blowing ex-employee who said Ranbaxy created "a complicated trail of falsified records and dangerous manufacturing practices".
Announcement of the prohibition on Mohali's US exports wiped nearly $1 billion off Ranbaxy's share value earlier in the week as a slew of brokerages downgraded the company's earnings prospects.
"We appreciate more is expected from Ranbaxy and will continue to work together with the FDA for an early resolution of their concerns", not only with Mohali but with the other two plants, Sawhney said.
The Mohali plant was gearing up to produce off-patent copies of two blockbuster drugs -- Novartis AG's blood-pressure pill Diovan and AstraZeneca Plc's stomach ulcer medicine Nexium.