Ranbaxy Pharmaceuticals has said that the ongoing investigations by US authorities on alleged forgery and concealment of data will not have an impact on its $4.6 billion deal between the India’s largest pharma company and Japan’s Daiichi Sankyo. In a statement issued this afternoon, Ranbaxy said that “the company’s deal with Daiichi Sankyo is binding and final and remains on track”.

The deal-threatening case has come from the US Department of Justice (DoJ), which has filed a motion in District Court of Maryland alleging that Ranbaxy was involved in adulteration and forgery of data it submitted to US Food& Drug Administration (FDA). The case has been filed against Ranbaxy and its US-based consultant Parexel Consulting. The motion filed on July 3 charges falsification and concealment of crucial data to operate in the US market, which accounts for 23 per cent of former’s $1.6 billion revenues. The motion alleges that officials at Ranbaxy’s plant at Paonta Sahib in Himachal Pradesh fabricated test data to show their pills met FDA standards. Ranbaxy, on the other hand, denied the allegations and asserte that it has not committed any wrongdoing (see its statement).

At the opening of markets today, shares of Ranbaxy plunged by 11 per cent to Rs 475. If these allegations are proven, the company may have to pay up billions of dollars as liability. The motion says that Ranbaxy has used unapproved active pharmaceutical ingredients (API), which has resulted in what US government believes introduction of adulterated and misbranded products.

United States FDA wants access to certain audit documents that were prepared by Parexel.

These documents include two specific draft standard operating procedures (SOPs), details on the Toansa plant and the API facilities of Panota Sahib, validation protocols and reports for two products and certain quality control procedures, detailed by the consultant from Ranbaxy. The pharma major has denied to provide these reports countering that it’s protected by attorney-client privileges.

Last month Daiichi-Sankyo had announced its plans to acquire a majority stake in Ranbaxy through an all-cash deal valued at $4.6 billion and it has also recently announced an open offer to acquire Ranbaxy shares. It had also recently settled all pending patent disputes it had world over with Pfizer Inc. Ranbaxy’s Paonta Sahib plant was inspected in 2006 by FDA officials, who found several inconsistencies regarding the manufacturing process. Then in 2007, federal agents raided Ranbaxy’s North American headquarters in Plainsboro and a manufacturing facility in New Brunswick in the US.

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