Ranbaxy Laboratories Ltd. (RBXY) fell the most in more than three months after announcing a recall of the company’s generic version of Pfizer Inc. (PFE:US)’s cholesterol treatment Lipitor.
Ranbaxy is pulling the pills from the U.S. because they may contain small particles of glass, the company said in a statement on its website. The recall of atorvastatin will cause a “temporary disruption” in the supply of the drug and it will take two weeks to complete an investigation into the issue, Ranbaxy said.
The recall by the drugmaker, based near New Delhi, may lead to a shortage of generic Lipitor in the U.S., Stephanie Yao, a spokeswoman for the Food and Drug Administration, said in an e- mail. The agency is working with other drugmakers to help fill the void in supply, she said.
About 1 million prescriptions a week are written in the U.S. for generic copies of Lipitor, and Ranbaxy is the biggest supplier of the drug, according to data compiled by Bloomberg. Without Ranbaxy, Mylan Inc. (MYL:US) and Watson Pharmaceuticals Inc. (WPI:US) may be able to pick up a larger share of the market, said Bloomberg Industries analyst Asthika Goonewardene.
“There will be a financial loss linked to the recall,” said Nitin Agarwal, an analyst at IDFC Securities Ltd. in Mumbai. “Supplies will be out of the market for the next two weeks and that should have an impact on their market share.”
Shares of Ranbaxy, a unit of Japan’s Daiichi Sankyo Co. (4568), declined 3.1 percent to 496.95 rupees at the close in Mumbai, its biggest single-day loss since Aug. 10. The benchmark BSE India Sensitive Index fell 0.1 percent.
Ranbaxy, which was cleared by U.S. regulators to sell copies of the cholesterol pill last year, agreed to make changes at its manufacturing plants to settle allegations that its pharmaceuticals didn’t meet FDA standards, according to a proposed settlement filed by the Justice Department in January. The company announced on Dec. 21 that it had reached an agreement with the FDA and committed to tightening procedures and policies to comply with industry standards.
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