Ranbaxy's version of the blockbuster antibiotic drug Augmentin is not making its mark in the US and this deterred investors on Wednesday.

As a result, the scrip of India's largest pharmaceutical company in terms of market capitalisation slipped 1.21% to Rs 622 by 11:44 IST today. A total of 18,071 Ranbaxy shares changed hands on BSE till then. According to media reports, Ranbaxy's generic product Augmentin is yet to make a dent in the US markets, as competitors such as Switzerland's Geneva Pharma and Teva of Israel are competing aggressively and blocking distribution channels.

The product, which was launched in the US in mid-January, has garnered a market share of less than 1%, while Geneva and Teva have together captured around 80% of the prescription share for this antibiotic. It was expected that the company would garner around 1-3% of the market share for Augmentin, in any case, due to its rather late entry into that area. The total branded market share for Augmentin is worth $1.8 billion (about Rs 8,640 crore). Much of the current weakness in Ranbaxy is blamed on the overall negative sentiment in the market. As for individual outlook, the company is expected to put up an impressive performance in the current year on the back of at least two successful drugs - cefuroxime axetil and Isotretinoin. Additionally, the revenues from Augmentin will also pour in. However, there's some concern over the next year as the company does not have any major molecule in the pipeline that can keep up the revenue growth tempo.

The Ciprofloxacin drug which helped Ranbaxy to earn huge royalty payment from Bayer is not expected to garner huge inflows in future since the patent on the drug expires in December 2003. This single product has been one of Bayer's most successful drugs in recent years. Evenso, the real triggers for Ranbaxy Labs could be the Claritin generic and the New Drug Application of Ofloxacin, in addition to its New Chemical Entity and New Drug Delivery System drugs. Recently, Ranbaxy Pharmaceuticals Inc, a wholly-owned subsidiary of the company, received tentative approval from the US Food and Drug Administration to market Benazepril Hydrochloride Tablets in 5 mg, 20 mg and 40 mg strengths. RPI's formulation of the Benazepril Hydrochloride tablet is bio-equivalent to the listed drug Lotensin of Novartis Pharmaceutical Corporation. The branded sales of Lotensin was US$ 332.5 million (approximately Rs 1,600 crore (Rs 16 billion) in 2002, as per IMS MAT, December 2002.

Lotensin is indicated for treatment of hypertension, which can be used separately or in combination with thiazide diurectics. Another angiotensin converting enzyme inhibitor Captopril has caused agranulocytosis, especially in patients with renal impairment or collagen vascular disease. There is no adequate data available to show that Benazepril Hydrochloride tablets (brand name Lotensin) does not have a similar risk. Analysts feel the approval for launching the generic form of Lotensin may boost the company's sales as well as profits. It will further expand the company's overall product portfolio and add depth to the number of cardiovascular products offered by it to the US healthcare system. For the full year, on a consolidated basis, Ranbaxy registered a 130.7% rise in net profit to Rs 608.4 crore (Rs 6.08 billion) in FY 2001) on a net sales rise of 40.3% to Rs 3,823.4 crore (Rs38.23 billion) in FY 2001).

BSE code: 500359