<div>A<em>s Ranbaxy and its parent Daiichi rely on each other's strengths to steer through troubled times, <strong>Dr Tsutomu Une</strong>, chairman, Ranbaxy Laboratories, talks to <strong>BW's P.B. Jayakumar</strong> on the hybrid model business as well as FDA issues</em></div><div> </div><div><strong>The US FDA is yet to give a timeline related to closure of issues as per the consent decree. When do you expect this to conclude?</strong></div><div>Ranbaxy has already conformed to the consent decree. The consent decree is a fairly detailed document and it has identified all the required processes. Ranbaxy should simply follow those processes (to comply). In the meantime, a third party consultant will recommend the FDA to inspect. Then the FDA will come according to their recommendation and will inspect, to know whether Ranbaxy's operations are good enough or not. If they are satisfied, the ban will be revoked. Those processes are clearly identified in the document. It is not the timeframe issue; it is a mutual consent decree between both the parties and how you proceed with that to comply. I hope sooner or later it will happen.</div><div><strong><br /></strong></div><div><strong>There is a belief among many of Ranbaxy's retail investors, analysts and general public that Daiichi-Sankyo management was not aware of the gravity of issues related to the FDA and proper due diligence was not done during the time of acquisition. Your comments...</strong></div><div>We did the due diligence, by Daiichi Sankyo, and had recognised as on date warning letters given to Ranbaxy. The FDA enforcement action came after the acquisition. We did our own due diligence and we believed Ranbaxy is a valuable company to invest and that is why we did it (the acquisition). Only after that the FDA action came and that was unexpected and unfortunate.</div><div> </div><div><strong>In the pharmaceutical world, there are not many successful examples of big collaborative business between a generic company and a pure innovator company. What prompted the Daiichi-Sankyo management to try a hybrid model than allowing Ranbaxy to pursue its own growth like any other generic major?</strong></div><div>There are similarities and differences between our model and some similar innovator/generic companies' model. An important difference is that our hybrid model is looking forward to create lots of synergy across every part of the value chain from research and development, manufacturing, distribution and marketing. In each of these elements we look forward to integrate and how to optimise. In case of some others, they are totally independent. That is the difference. The similarity is that they also respect innovative and generic businesses of each other. There are many opportunities nowadays to integrate, to help, and complement each other — you can imagine in clinical development research, manufacturing, distribution. In the case of front end creation, in markets where Ranbaxy is very strong, such as emerging markets, Ranbaxy will take care of its own and Daiichi Sankyo's innovative products, both. If Daiichi Sankyo has a hold, it will take care of both. In the areas where both companies are strong and having different types of businesses — such as the US -Daiichi Sankyo will remain as Daiichi Sankyo and Ranbaxy will remain as Ranbaxy in the front end. Still, if we find some synergies in particular areas, both parties will collaborate. Back end business is also a part of the hybrid model and both companies will complement each other. Wherever, Daiichi Sankyo is strong, Ranbaxy can utilise the backend strength of Daiichi Sankyo and vice versa. In that way, we plan to integrate both businesses throughout the value chain and that is the vision on hybrid model.</div><div> </div><div>If you look at why we keep Ranbaxy as a listed company in India, it is because in this business model, an important element is to respect business expertise of each other - it is necessary to have some sort of good tension between the two parties.</div><div> </div><div><strong>When compared to other multinational drug companies operating in India, your shareholding is much less. Do you intend to increase it in near future and de-list the company?</strong></div><div>No, we are comfortable with the current shareholding and are not planning to decrease or increase it.</div><div><strong><br /></strong></div><div><strong>The share prices of Ranbaxy never reached your offer price after the acquisition. When do you consider Daiichi-Sankyo can recover the investments made in Ranbaxy?</strong></div><div>It is not appropriate to say when, but I can say nowadays Ranbaxy is a very highly critical and important asset for Daiichi Sankyo. The contribution to the top-line and bottom-line is getting bigger and bigger. So we are happy that Ranbaxy is a part of our group and we expect more contribution in the coming years.</div><div> </div>
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