New setback to Ranbaxy as US FDA revokes tentative approval to two drugs

The US Food and Drug Administration (FDA) has revoked its tentative approval granted to Ranbaxy Laboratories to make a generic version of AstraZeneca Plc's heartburn drug Nexium.

The FDA has also denied Ranbaxy 180-day marketing exclusivity for a generic version of Roche's antiviral drug Valcyte, according to a company statement to the Bombay Stock Exchange on Thursday.

Ranbaxy said it received communication from the FDA that the regulator rescinded the previously granted tentative approvals for its application for generic-drug approval for esomeprazole magnesium delayed-release capsules, 20 mg and 40 mg, and for valganciclovir hydrochloride tablets USP, 450 mg.

According to the statement, the FDA said that its tentative approvals were in error because it had already stopped supplies from the company's facilities mentioned in the applications at the time the approvals were granted.

The developments deal a fresh setback to Ranbaxy. The company, which is being acquired by Sun Pharmaceutical, has been trying to put its US business on track after facing FDA bans over quality-related problems.

Analysts feel the development is perhaps a good lesson for the pharmaceutical industry in terms of the follow-on impact that negative developments can have in regulatory matters, especially those relating to the US FDA. "While it is not uncommon for withdrawal of tentative approval to happen, the news about Valcyte has come as a surprise as this would mean the around $50 million the company was to make from this upside may not happen," says Aditya Khemka, analyst at brokerage Ambit Capital.

Ranbaxy said in the statement it was disappointed with the FDA decisions and was actively evaluating all available options to "preserve its rights".