RANBAXY 2004 FULL YEAR SALES UP 21 % AT USD 1178 MN; R&D EXPENSES GROW 41%; PAT- MARGINAL GROWTH TO USD 164 MN

[New Delhi - January 18, 2005]

The Board of Directors of Ranbaxy Laboratories Limited (Ranbaxy) at their meeting held today took on record the un-audited results for the quarter (Q4) and the year ended December 31, 2004. The Company also announced the consolidated global results for the quarter (Q4) and the year ended December 31, 2004.

Consolidated Global Results (Ranbaxy Laboratories Limited and Subsidiaries)

Year ended December 31, 2004 (Year 2004)

For the year, the Company recorded Consolidated Sales of Rs. 53,333 Mn (USD 1178 Mn) (2003: Rs.45,301 Mn, USD 972 Mn), recording a sales growth of 18% (21% in USD). Operating profit before interest, depreciation and amortization was Rs.11,305 Mn, (Rs.10,577 Mn), at 21.2% of sales in 2004. Operating profit before tax and extra ordinary items at Rs.9,496 Mn (Rs.9,310 Mn). Profit before tax at Rs.9,735 Mn (Rs.10,147 Mn), while Profit after tax and minority interest was at Rs. 7,430 Mn (USD 164 Mn), 2003 at Rs. 7,594 Mn(USD 163 Mn).
While sales (in dollar terms) in 2004 have shown a healthy growth over 2003 at 21%, PAT has shown a marginal growth over 2003. This is in-spite of the investments made in 2004 to strengthen the corporate competitiveness.

R&D expenses have been further ramped up significantly. In fact, in Q4 2004, R&D expenses doubled as a result of the large number of USFDA filings in December 2004 and the volume of studies undertaken.
Ranbaxy is moving ahead with its preparations for the anticipated launch of Atorvastatin in USA and Europe following an internal assessment of the arguments presented at the District Court Hearing in USA in December 2004 on the Atorvastatin para IV patent action and some recent European litigation developments. Expenditure on facilities, raw material purchases, equipment and legal costs have begun. This has (and will) impact Working Capital, Capital expenditure and other expenditure.

Year-end adjustments have been made for pension contributions, product discontinuation and the write offs of Rofecoxib and HIV products.

USA market shares have been expanded further whilst the pricing pressures in the USA generic marketplace, which became apparent in July 2004 have intensified further through Q4.

The depreciation of the US $ against the Indian Re. has been absorbed.

Quarter ended December 31, 2004 (Q4)

The Consolidated Sales of Ranbaxy Laboratories Limited and its subsidiaries was at Rs.14,235 Mn (USD 316 Mn), witnessing a sales growth of 24% (2003: Rs.11,444 Mn; USD 251 Mn). Operating profit before interest, depreciation and amortization was Rs.2,206 Mn (Rs. 2,716 Mn). Operating profit before tax and extra ordinary items was at Rs.1,792 Mn (Rs. 2,327 Mn). Profit before tax was at Rs.1,826 Mn (Rs.2,467 Mn) while Profit after tax and minority interest stood at Rs.1,565 Mn (USD 35 Mn) (2003: Rs 1,758 Mn, USD 39 Mn). Global Sales

For the year ended December 31, 2004, the Company’s Global Sales was at USD 1178 Mn, a growth of 21%. USA accounted for 36%, while Europe and BRIC countries constituted 16% and 26% of the global sales. During the period Europe recorded a significant growth of 116% over the corresponding period. The international dosage forms business constituted 70 % of global sales as against 67 % in the corresponding period of the previous year.

For Q4, Global Sales was at USD 316 Mn, witnessing an increase of 26% over the corresponding quarter last year. USA operations achieved sales of USD 128 Mn registering a growth of 19% while Europe recorded sales of USD 53 Mn, clocking a growth of 139%. France with USD 20 Mn, UK with USD 13 (+23%) and Germany with USD 7 Mn (+46%) made strong contributions from this region. Besides, Russia (incl. Ukraine belt) achieved a growth of 55% with sales of USD 15 Mn.

In the recently published 'IMS World Review 2004', Ranbaxy was the only Indian Company listed in the top 100 Pharmaceutical Companies of the World. The Review also ranked Ranbaxy as the 15th fastest growing Company in the World. In Europe, it was rated as the 8th fastest while in North America, it was the 13 th fastest growing Company in 2003.

USA

The Company received 4 ANDA approvals in Q4. During the year the Company made 26 filings to the USFDA and received 16 approvals. The cumulative product filings reached 146 with 96 approved and 50 awaiting approval. Separately, 3 additional ARV filings were made with the USFDA, under the US Presidents PEPFAR programme.

Despite challenging market conditions and increased competition resulting in pricing pressures, the USA IMS generic prescription shares have continued to strengthen. The Company is also increasing its level of investments in the proprietary business besides the generic business, to create a robust product pipeline.

Innovative arrangements were negotiated with Teva and Andrx during Q4 in-order to expand further the penetration of Ranbaxy generic products

Europe

Ranbaxy achieved a day one launch of Clarithromycin in the UK in November 2004, through successfully defending a court action brought by Abbott Laboratories to prevent Ranbaxy from selling immediate release Clarithromycin (tablets, 250 mg and 500 mg and suspension 125mg/ 5ml & 250mg/5ml) in the UK market.

In the expanded EU, Ranbaxy has significantly increased its regulatory filings to capitalize on the opportunities available in this region.

Ranbaxy made 39 National filings for 25 products in 11 EU Reference Member States and 71 Mutual Recognition Procedure applications for 6 products in 21 EU Concerned Member States.

India

In Q4, Ranbaxy achieved sales of USD 53 Mn, recording a growth of 6%. The prescription share improved from 3.23% to 3.25% (Oct’04 MAT basis-C Marc). The Company continued to consolidate its position in the chronic therapy areas .

The contribution of the NDDS (Novel Drug Delivery Systems) portfolio to Ranbaxy’s sales increased to 6% (ORG-Nov’04 Cum) as against 5% (ORG- Nov’03 Cum).

Storvas (Atorvastatin) and Volini entered the list of Top 100 brands of the industry.

During the year, Ranbaxy signed an exclusive licensing agreement with Atrix Laboratories, Inc, USA, to develop and commercialize Eligard® (leuprolide acetate for injectable suspension) in India. Leutenizing Hormone Releasing Hormone (LHRH) agonists, like Eligard, are commonly used for the treatment of hormone-responsive advanced prostate cancer.

Ranbaxy Global Consumer Healthcare

During the year Ranbaxy Global Consumer Healthcare achieved a growth of 24%. Revital (+22%), Garlic Pearls (+22%) and Gesdyp (+13%) were among the top performing brands demonstrating strong growth. Revital was ranked 16 (MAT Nov. 04) capturing the highest ever market share of 71.5% (YTD Nov. 04).

Ranbaxy Global Consumer Healthcare also launched its range of New Age Herbals (branded Olesan and Eat Ease) further expanding and strengthening its portfolio of products.

Research & Development

Ranbaxy is setting up a NDDR (New Drug Discovery Research) facility on the outskirts of Delhi, which will be called R&D III and will be operational from Q2, 2005 .

The New Chemical Entity pipeline (NCE) focusing on four disease segments, viz. Infection, Urology, Inflammation/Respiratory and Metabolism, continued to advance well. RBx 7796 developed for both Allergic Rhinitis and Bronchial Asthma is undergoing proof-of-concept trials and no safety and tolerability issues have been reported. The Urology molecule, RBx 9841 has now completed a multiple ascending dose study in normal volunteers and found it to be safe and well tolerated. Phase II proof-of-concept clinical trials for this molecule will soon be initiated.

Ranbaxy’s collaborative research programme with Medicines for Malaria Venture (MMV) achieved a potential breakthrough in its anti-malarial drug. On successful completion of pre-clinical studies, an IND was filed in UK and India. The Company has been granted permission to conduct human clinical trials in both countries. Phase-I study on this molecule has shown RBx 11160 to be safe and well tolerated with no clinically significant adverse events after single as well as multiple dose studies. The proof-of-concept studies will begin in Thailand this month.

The collaborative research program with GlaxoSmithKline plc (GSK) is also progressing well. Two research programmes in different therapeutic areas have been chosen and are now underway.

The Novel Drug Delivery Systems (NDDS) programme is progressing well. The Company launched Loratadine and Pseudoephedrine extended release tablets (10mg + 240 mg), an OTC ANDA, in the USA market through the Ohm division during Q4, 2004.

Expansion of Operations

Ranbaxy is also expanding its manufacturing capacities in preparation for its global expansion plans.

In India, new manufacturing facilities are being set up in Batamandi (Himachal Pradesh), Mohali (Punjab) and Lalru ( Punjab). The existing plants in Toansa (Punjab), Paonta Sahib (Himachal Pradesh), Dewas (Madhya Pradesh) and Terminal Road ( New Jersey, USA) are also being expanded. A state-of-the-art manufacturing plant is also being set up in Brazil to cater to the growing needs of that region.

Ranbaxy has also entered new markets by setting up its own subsidiaries in Spain, Portugal and Canada.

These expenditures and investments are being undertaken in order to ensure that Ranbaxy is well positioned to achieve its milestone of USD 2 billion sales in 2007 and it’s Vision 2012 goal of USD 5 billion sales, having passed the USD 1 billion mark in February 2004 (MAT).

Commenting on the business results, Dr. Brian W. Tempest, CEO & Managing Director, Ranbaxy, said, “We see winds of change in an increasingly competitive international pharmaceutical business and are implementing a robust strategy, brick by brick, to secure the future of our Company amongst the leading global pharma players of tomorrow.”
Ranbaxy Laboratories Limited, India's largest pharmaceutical Company, manufactures and markets brand and generic pharmaceuticals and Active Pharmaceutical Ingredients. Ranbaxy's continued focus on R&D has resulted in several approvals in developed markets and significant progress in New Drug Discovery Research. Ranbaxy's foray into Novel Drug Delivery Systems has led to proprietary "platform technologies" resulting in a number of products under development. The Company is selling its products in over 100 countries and has an expanding international portfolio of affiliates, joint ventures and alliances, ground operations in 44 countries and manufacturing operations in 7 countries.

For further information please contact:

Ramesh L. Adige
Vice President - Corporate Affairs
Ranbaxy Laboratories Ltd.
No 19, Nehru Place,
New Delhi -110019
Tel (Direct): +91-11-26464037
e-mail: ramesh.adige@ranbaxy.com

or
Raghu Kochar
Director-Corporate Communications
No 19, Nehru Place,
New Delhi -110019
Tel (Direct): +91-11-26002075
Mobile: +91-9811617256
e-mail: raghu.kochar@ranbaxy.com

or
Krishnan Ramalingam
Manager- Corporate Communications
Ranbaxy Laboratories Ltd.
No 19, Nehru Place,
New Delhi -110019
Tel (Direct): +91-11-26002075
Mobile: +91-9810042540
e-mail: krishnan.ramalingam@ranbaxy.com