Senior Editor P.B. Jayakumar
Soon Ranbaxy Laboratories will cease to exist as the company is merging with Sun Pharmaceutical Industries.
Such mergers and acquisitions are common in the global pharmaceutical industry. Many big global companies of the past are now nameless divisions of some of the pharma giants. Indeed, even the biggies also merge, just to grow.
But for the Indian pharmaceutical industry this is a new experience. Two of its top companies are merging to form the fifth largest generic company in the world.
Many executives and owners of domestic Indian pharmaceutical companies are sure to feel an unexplained pain when they come to know that Ranbaxy is no more. Yes, Ranbaxy, with its legacy dating back to 1937, and Dr Reddy's Laboratories were perfect examples for other entrepreneurs of the heights Indian companies could scale.
Ranbaxy was actually a drug distribution firm in 1937 and run by two cousins Ranjit and Gurbax. It was acquired by Bhai Mohan Singh in 1947. In the '80s and '90s Bhai Mohan Singh's son Parvinder along with D.S. Brar showed the world how an Indian company can tap the global markets, selling drugs in the developed markets like the US and Europe.
Ranbaxy was the largest selling drug maker in India for many years. It was also among the first Indian companies to challenge the patents of multinationals in a major way. In mid-2000, it fought an epic patent war with Pfizer in over 70 countries over the then largest selling drug in the world, Lipitor.
It was also a dream for most pharmaceutical professionals to join Ranbaxy. Its impeccable systems and processes that matched any multinational company were copied by many entrepreneurs and top executives of other home grown companies.
Somewhere down the line, Ranbaxy strayed from its legacy and as the US Food and Drug Administration found out. It falsified data and lied to the regulator for which it had to pay heavily later. Its promoters, Parvinder's sons - Malvinder and Shivinder - exited from their family jewel in 2008 pocketing a handsome booty and handing over the company and its liabilities to Daaichi Sankyo of Japan. Daiichi tried but it was beyond its control to bail out Ranbaxy in an alien land.
The only option before it was to somehow recover investments and give the company to someone else. No one better than Dilip Shanghvi, a master in the art of turning around ailing drug companies.
Shanghvi may be able to streamline the businesses, plants, processes and profits of Ranbaxy, which will remain only as a name in the hearts of many people.