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Ranbaxy, Daiichi confirm deal

NEW DELHI: Ranbaxy Laboratories on Thursday said its deal to sell promoters’ stake to Japanese drug major Daiichi Sankyo is ‘binding and final’. “Following intense speculation in sections of the media and the stock market, Daiichi Sankyo and Ranbaxy reiterate that the agreement between Daiichi, Ranbaxy and the Singh family, the promoters of Ranbaxy, is binding and final, subject to regulatory approvals,” a joint statement issued by the companies said.

“Daiichi Sankyo, Ranbaxy and the Singh family remain committed to the transaction and to the vision of creating a complementary business combination that provides sustainable growth by diversification and an enhanced global reach. Daiichi Sankyo, Ranbaxy and the Singh family stand by the deal and confirm that the terms of the deal remain unchanged. All the synergies expected to accrue to the combine, remain intact as before,” the statement added.

The share purchase and share subscription agreement has already been unanimously approved by the boards of both companies. “Coupled with the approval now in place from the shareholders, this clears the decks for the deal to proceed as planned,” it said.

Last month, Ranbaxy had announced that the promoters have signed a share purchase agreement with Daiichi Sankyo to sell off their entire stake of 34.8 per cent in the company to the Japanese firm for Rs. 9,576.14 crore.

PTI reports from New York

The U.S. drug regulator, FDA, which has charged Ranbaxy with selling unsafe medicines in the country, has come under the Congress scanner and will be probed for its conduct in approving the Indian pharma major’s products and other potential violations in the matter. A Congressional Committee has said that it would examine Ranbaxy’s drug approvals in the U.S. and potential violations of manufacturing regulations, a media report said. Besides, the House Energy and Commerce Committee would “look at why the FDA continued to approve medicines made by the company and allow shipments into the U.S. while it was questioning Ranbaxy’s manufacturing processes,” the Star Ledger newspaper reported.

The report said that the Committee “wants to find out whether the FDA knowingly allowed unsafe and ineffective medicine to enter the U.S.” The inquiry stems from a federal court filing by the US Department of Justice, where it has been alleged that there have been “a pattern of systematic fraudulent conduct, including submissions by Ranbaxy to the FDA that contain false and fabricated information about stability and bio equivalence of the company’s generic medications.”

The Justice Department has also cited a failure by Ranbaxy to report in a timely fashion it distributed drugs that did not meet proper specifications, and has accused the company of concealing violations of good manufacturing practice regulations from FDA.

“If these allegations are true, Ranbaxy has imperilled the safety of Americans in a manner similar to the generic drug scandal we uncovered twenty years ago,” the Star Ledger report quoted House Energy and Commerce Committee Chairman John Dingell as saying.

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