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Ranbaxy recovers; U.S. fine overhang seen ending

Source : REUTERS
Last Updated: Tue, May 14, 2013 11:43 hrs
Ranbaxy Q1 net down 68 pct; drop less than f'cast

Ranbaxy Laboratories Ltd shares recovered on Tuesday as U.S. fine overhang was seen ending.

Shares in Ranbaxy Laboratories Ltd gained 3 percent, after earlier declining as much as 4.2 percent, as traders called those falls extensive.

The generic drugmaker slumped earlier, a day after pleading guilty to U.S. felony charges related to drug safety and agreed to pay $500 million in civil and criminal fines.

However, analysts noted that Ranbaxy in December 2011 set aside $500 million to resolve the potential criminal and civil liabilities related to the investigation by the U.S. government into its manufacturing practices and falsifying data.

Analysts say the fine announced on Monday could end the overhang that had been created over the U.S. investigation, and allow Ranbaxy to focus on its U.S. sales.

"People are buying shares as uncertainty of U.S. FDA (Food and Drug Administration) and DOJ (Department of Justice) is out of equation now, which is a big boost," said Ranjit Kapadia, senior vice president at Centrum Broking.

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