The share of the US market in Ranbaxy Laboratories' total revenue has declined to 26.5 per cent in April-June this year, down from over 42 per cent in 2003 and 36 per cent in 2004.
Even though there was a small increase of 3.3 per cent in absolute terms in the US revenues from $412 million in 2003 to $426 million last year, the figure fell 10.8 per cent from $92 million in April-June 2004 to $82 million last quarter. In January-March this year, its US sales stood at $80 million, a decline of 24 per cent year on year.
This strikes a discordant note for the company, which has been focusing sharply on the US market in the last few years, particularly under former CEO D S Brar. According to the company, half of its projected revenue of $2 billion in 2007 is to come from the US market.
While the company is banking on its US product pipeline, valued at over $30 billion and as many as 11 First-to-File products, it is hard to evaluate how much of the promised potential will actually add to the bottomline.
The news from the US marks a double whammy for Ranbaxy, whose share of the domestic pharmaceuticals market continues to decline. It stood at 4.41 per cent this year (moving annual total, June 2005), against 4.58 per cent last year, 4.62 per cent in 2003 and 4.64 per cent in the year before.
In India, as Ranbaxy has been slipping, the fortunes of its home-grown rivals, Cipla and Sun Pharma, have been improving.
"In terms of competitive placement, Ranbaxy has been able to narrow the market share gap versus the top company with (the) gap becoming 1.0 per cent in 2004 as against 1.8 per cent in 2001. Under same period, the market share gap widened with respect to (the) fourth ranked company, increasing by 0.3 per cent as against 0.1 per cent in 2001," said the company in a written response to Business Standard.
Analysts however take a different view. "Two years ago, Ranbaxy's profits were much more than that of Cipla and Sun Pharma put together while for this quarter end, both these companies have profits which individually surpass those of Ranbaxy."
Others site Ranbaxy's sharp focus on the overseas markets and no significant acquisition in the country. "The US was the lowest hanging fruit some years back and vied for. With the price erosion in recent times, other markets have started figuring on the radar of generic companies," said an analyst.
Sanjiv Kaul, advisor, ChrysCapital, says the US is better dealt through an "organic growth model" and Europe through an acquisition-led strategy.
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