Shares of Ranbaxy Laboratories today fell over 4 per cent in early trade, after the company’s US subsidiary agreed to pay $500 million, pleading guilty to “felony charges” relating to manufacture and distribution of certain adulterated drugs made at two India units.
After making a weak opening, the scrip further tanked 4.22 per cent to Rs 421 on the BSE. On the NSE, the scrip was down 4.21 per cent at Rs 421.15.
However, the stock pared early losses in an overall strong stock market and was trading 1.37 per cent higher at Rs 445.55 on the BSE in the afternoon trade. Similarly, the stock was trading up by 1.34 per cent at Rs 445.60 on the NSE.
“With this settlement, the long lawsuit is now over for the company. Thus, with this development, one of the overhangs on the stock is out,” said Sarabjit Kour Nangra, V-P, Research-Pharma, Angel Broking.
Pleading guilty to “felony charges” relating to manufacture and distribution of certain adulterated drugs made at two India units, the US subsidiary of Ranbaxy had yesterday agreed to pay $500 million — the largest settlement by a generic medicine maker till date.
The US Justice Department said in a statement: “In the largest drug safety settlement to date with a generic drug manufacturer, Ranbaxy USA, a subsidiary of Indian generic pharmaceutical manufacturer Ranbaxy Laboratories, pleaded guilty today to felony charges relating to manufacture and distribution of certain adulterated drugs made at two of Ranbaxy’s manufacturing facilities in India.”
“Ranbaxy also agreed to pay a criminal fine and forfeiture totalling $150 million and to settle civil claims under the False Claims Act and related State laws for $350 million.”