Malvinder Mohan Singh, chairman, CEO and managing director of Ranbaxy Laboratories, has stepped down on Sunday, ending an era in the Indian family-controlled generic drugs giant's history.
The company has elected Atul Sobti, currently Ranbaxy's chief operating officer, as new CEO and managing director, while Dr. Tsutomu Une, non-executive director of Ranbaxy, has been elected as chairman of the board.
Sobti has been the company's COO since January 2007, and Une is senior executive officer of Japanese drugmaker Daiichi Sankyo Company Ltd, which owns 63.92 per cent of Ranbaxy's outstanding shares. (See: Daiichi Sankyo completes Ranbaxy acquisition).
"It was a difficult decision to separate from Ranbaxy," Singh said in a statement. "But it was the right time for me to do so. I leave with complete confidence that the initial transition phase that followed Daiichi Sankyo's acquisition of majority shareholding interest in Ranbaxy has been completed successfully; and that the company's excellent team of management colleagues are well-positioned to take full advantage of the company's growth opportunities.''
Singh had assumed the additional role of chairman in December for a five-year term, following the company's takeover by Daiichi Sankyo. Singh joined Ranbaxy in 1998 and its board in 2003.
Takashi Shoda, the CEO of Daiichi Sankyo applauded the efforts put in by the Singh family in enhancing the brand value of Ranbaxy in the international market.
''We especially acknowledge the contributions of Mr. Singh. His strategic vision and passion for the pharmaceutical industry will be missed in Ranbaxy's operations. We wish him continued success as he pursues his many other business interests,'' he added.
''Singh will address Ranbaxy employees on Monday and further decisions regarding the board will be taken at the company's AGM (annual general meeting) on Thursday,'' said Sobti.
Two other Ranbaxy board members also stepped down - Sunil Godhwani, chief executive and managing director, Religare Enterprises, and lawyer Balinder Singh Dhillon. The new board currently comprises seven members.
Sobti is leading Ranbaxy's negotiations with the US Food and Drug Administration (FDA).
In February, Daiichi Sankyo and Ranbaxy 'formed a team' after the FDA accused Ranbaxy of falsifying data and test results, and banned 30 of Ranbaxy's drugs made in its Poanta Sahib and Dewas plants and stopped fresh marketing approvals of drugs made in both the facilities. (See: Ranbaxy plant in India falsified data: US FDA and Daiichi, Ranbaxy form team to face FDA charges).
Consequently, the company reported a fourth quarter loss of Rs698 crore with the US sales falling 16.85 per cent to $89 million down from the corresponding figures of $104 million for last year. The US markets accounts for about a quarter of its annual sales of $1.7 billion. (See: FDA woes hit Ranbaxy in Q4).
The plunge in Ranbaxy's share price following the troubles with the FDA as well as the global rout in equities last year forced Daiichi Sankyo to write down 351.3 billion yen in goodwill on the Indian company.
Daiichi Sankyo has been buying up overseas companies in a bid to secure future revenue and compete against bigger rivals. However, Daiichi Sankyo is the only one of Japan's top drugmakers to buy a generics maker. It has recently started selling one of its drugs through Ranbaxy in India.
In April, Ranbaxy-promoted firm Solrex Pharmaceuticals had bought a further 3.3 per cent stake in Pharmaceuticals & Chemicals, taking its holding in the Chennai-based pharma company to 14.7 per cent, in its attempt to take a controlling stake in the company.
The takeover will expand Ranbaxy's footprint in the cephalosporin space, where Orchid is India's biggest and amongst the world's top five manufacturers. (See: Why Ranbaxy fancies Orchid).
Daiichi Sankyo, established in 2005, focuses on thrombotic disorders, malignant neoplasm, diabetes mellitus, autoimmune disorders, hypertension, hyperlipidemia or atherosclerosis and bacterial infections.
Ranbaxy is one of India's largest generic drugmaker, with operations in 49 countries and manufacturing operations in 11 countries. It has a strong presence in the dermatology market including steroids with products such as Zole-F, Suncros, Efflora, Fucidin and Teczine, among others.
Recently it expanded its derma portfolio by acquiring the marketing rights from Ochoa Laboratories Limited (Ochoa) for its entire range of dermatological and lifestyle products.