Foreign brokerages downgrade Ranbaxy
Foreign brokerages have downgraded Ranbaxy Laboratories after the US FDA (Food and Drug Administration) recently invoked its Application Integrity Policy (AIP) against the company’s Ponta Sahib facility.
By ET Bureau |
MUMBAI: Foreign brokerages have downgraded Ranbaxy Laboratories after the US FDA (Food and Drug Administration) recently invoked its Application Integrity Policy (AIP) against the company���s Ponta Sahib facility.
Macquarie Securities downgraded Ranbaxy to underperform and cut its price target by 45% to Rs146. "The AIP is invoked when a company���s actions raise significant questions about the integrity of data in drug applications. We believe the stock will further de-rate on the back of this news," the investment bank said in a report.
Post this development, Deutsche Bank has cut its price target on Ranbaxy to Rs130, while maintaining a sell rating. "While the full impact of the FDA ban is expected from the current quarter, Ranbaxy seems to be losing market share even for other products in the US," the bank said in a report.
Macquarie believes the FDA move could put some of the company���s First-to-File (FTF) products, which are associated to the facility, at risk. "There are a few FTF original applications are from the Ponta Sahib site and if data is found to be not reliable, a fresh application would be required, thus putting the FTF status on those products at risk," the investment bank said.
Macquarie thinks that these issues will stretch past this year and impact the company���s sales in 2010. "We cut our FY09E and FY10E EPS by 15% & 13.5% respectively to account for further weakening of US business and increase in R&D expense." it added.
At 2:50 pm Thursday, Ranaxy shares were down 9% at Rs144.70.
Macquarie Securities downgraded Ranbaxy to underperform and cut its price target by 45% to Rs146. "The AIP is invoked when a company���s actions raise significant questions about the integrity of data in drug applications. We believe the stock will further de-rate on the back of this news," the investment bank said in a report.
Post this development, Deutsche Bank has cut its price target on Ranbaxy to Rs130, while maintaining a sell rating. "While the full impact of the FDA ban is expected from the current quarter, Ranbaxy seems to be losing market share even for other products in the US," the bank said in a report.
Macquarie believes the FDA move could put some of the company���s First-to-File (FTF) products, which are associated to the facility, at risk. "There are a few FTF original applications are from the Ponta Sahib site and if data is found to be not reliable, a fresh application would be required, thus putting the FTF status on those products at risk," the investment bank said.
Macquarie thinks that these issues will stretch past this year and impact the company���s sales in 2010. "We cut our FY09E and FY10E EPS by 15% & 13.5% respectively to account for further weakening of US business and increase in R&D expense." it added.
At 2:50 pm Thursday, Ranaxy shares were down 9% at Rs144.70.
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