Ranbaxy Laboratories Ltd, India's largest drug maker by sales, expects strong growth in 2008 and would continue to look for acquisitions in India and abroad, Chief Executive Malvinder Singh said on Thursday.
Ranbaxy would sharpen its focus on improving margins and profitability, and expected to see benefits from its challenges to patents held by global pharmaceutical companies.
We expect a strong 2008 after a good 2007. We are aiming for 20 percent revenue growth, Singh told the Reuters India Investment summit in Mumbai.
Ranbaxy has a long-stated aim to be among the top five generic players globally with $5 billion in annual sales by 2012,
Analysts said after Ranbaxy's September quarter earnings that the operating performance was below their expectations. Singh said Ranbaxy was looking at lifting margins and profitability.
I'm not only looking at a focus on the topline of $5 billion, but what we are doing internally ... is clearly focusing on a much higher profitability as we move forward, Singh said.
Shares of Ranbaxy, valued at $3.7 billion, rose as much as 2.2 percent before closing up 1.3 percent up at 397.95 rupees in a Mumbai market that rose 0.3 percent.
Singh said Ranbaxy had challenged several patents in the United States. As the first to file (FTF) such challenges, it was entitled to win exclusive marketing rights for the drug if it succeeded.
He said Ranbaxy had a strong FTF pipeline and 83 pending approvals for launching generic drugs in the U.S. market.
Ranbaxy has been eyeing acquisitions to penetrate new markets and acquire additional skills. It announced eight deals last year, including the $324 million purchase of Romania's Terapia.
This year its M&A activity slowed. Singh said the company had backed out of the race for acquisitions such as Merck KGaA's generic unit as it was overpriced.
It doesn't mean we are slowing down in acquisitions. It just means this year we have chosen a different strategic gap to fill, which was our back-end technologies, niche therapeutic areas, he said.
This year, Ranbaxy acquired stakes in three niche Indian drug makers, Zenotech Laboratories Ltd, Krebs Biochemicals & Industries Ltd and Jupiter Bioscience Ltd.
Singh said India's fragmented pharmaceuticals market needed consolidation, and Ranbaxy saw a role for itself in the process.
If something comes up in India, I'll be the first one to go get it ... I would like to play, at Ranbaxy, a very active role to be a consolidator, Singh said.
I will be very happy if that consolidation starts.
(Editing by John Mair)