Ranbaxy Milestone

8/9/2019 Ranbaxy Milestone

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Ranbaxy: Milestones

Bhai Mohan Singh

Ranbaxy & Co sold over promoters debt

Ranbaxys original promoters, Ranjit Singh and Gurbax Singh, got together to form Ranbaxy &Co. with the aim of taking up the distribution of medicines in the country on behalf of foreignpharma firms. In the early 1950s, Gurbax Singh sought additional financing and turned to a localmoneylender, Bhai Mohan Singh. In due course, Gurbax Singh had built up huge debts to BhaiMohan Singh. When Bhai Mohan Singh came to collect, Gurbax offered to turn over theircompany to him instead. Bhai Mohan Singh agreed to the deal and on August 1, 1952, hebecame promoter of Ranbaxy & Co.

Sleeping pill helps Ranbaxy hit pay dirt

In the 1960s, when the Indias pharmaceutical market was largely dominated by foreign drugmakers, Ranbaxy tied-up with an Italian pharmaceutical company Lepetit SpA and beganproduction in 1962. Ranbaxys upside came in 1970, when the Government passed legislationthat effectively ended patent protection. Ranbaxy struck pay dirt early on, when it launchedCalmpose, a generic formulation of the hugely popular Roche drug Valium. Released in 1969,Calmpose immediately placed Ranbaxy on Indias pharma map. The company expanded quickly,and by 1973, Ranbaxy opened a new factory, in Mohali, for the production of active principalingredients (APIs). This facility enabled the company to expand its range of generic medicationsand ingredients. To finance its growth, the company listed on the stock exchange that year.

Kicking off global ambitions

Ranbaxys ability to produce generic medications at far lower cost than its branded competitorsenabled it to expand internationally, especially in less developed markets. It launched a jointventure in Nigeria and opened a production facility in Lagos in 1977. In 1987, the companybecame Indias leading antibiotic and antibacterial producer when it completed a new plant inToansa, Punjab. In 1988, the Toansa plant received US Food and Drug Administration (FDA)approval and by 1990, the company was granted an US patent for its doxycycline antibioticpreparation. The following year, the company bagged an US patent for its cephalosporinpreparations, and the company built a new facility for their production in Mohali. A bigmilestone for the company was recorded in 1992, when it reached a marketing agreement withEli Lilly & Co. The companies set up a joint venture in India to produce and market Lillysbranded pharmaceuticals for the domestic market while Lilly agreed to begin marketingRanbaxys generic medications in the US. Ranbaxy, thereby, gained access into the worldssingle largest drugs market.


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Boardroom coup ousts Bhai Mohan

In the late 1980s, in a family settlement Bhai Mohan Singh split the businesses between his threesons. The eldest son, and Bhai Mohan Singhs favourite, Dr Parvinder Singh and his family gotcontrol over Ranbaxy. Subsequently, however, the relationship between Bhai Mohan Singh and

Dr Singh soured on differences over Ranbaxys growth strategy. Dr Singh took over at the helmof the company in 1992, ousting his father in what was seen as a messy family feud. By then,Ranbaxy had grown into one of Indias largest pharmaceutical companies on the basis of itsgenerics production. Under Dr Singh, Ranbaxy adopted a new corporate mission in 1993 toannounce its reformulated ambitions: To become a research-based international company.

Outsiders step in

D.S. Brar

Dr Parvinder Singh died in 1999 and his right-hand man Mr D.S. Brar took over as companyleader. Mr Brar, on taking over, named family outsider Brian Tempest as company President.The new management team continued Dr Singhs expansion strategy, opening a newmanufacturing plant in Vietnam in 2001. Ranbaxy also sought new alliances, and in 2003 thecompany reached a global drug discovery and development partnership with GlaxoSmithKline.The companys international expansion also took a major step forward at the end of 2002, whenit agreed to acquire RPG (Aventis) in France. Ranbaxys sales had by then topped the $1 billionmark

Family back at the helm

Brian Tempest

In December 2003, Mr Brar, CEO and Managing Director, announced his decision to resign

from his post. Mr Brar was to complete his tenure in July 2004. He named Dr Brian Tempest(President, Pharmaceutical Division, Ranbaxy) as his successor. Mr Brars exit from thecompany was attributed to strained relationships between Ranbaxys professional managers andthe promoter family. Subsequently, in early 2006, after an interval of seven years, the promoterfamily re-took control at the helm of Ranbaxy, with Dr Parvinder Singhs son, Malvinder Singh,donning the mantle of CEO and MD.

Our New Delhi Bureau


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Ranbaxy Milestone