Daiichi Sankyo Is Confident on Resolving Ranbaxy Ban

May 28 (Bloomberg) -- Daiichi Sankyo Co.’s incoming Chief Executive Officer Joji Nakayama said he’s confident a ban imposed by U.S. regulators on some drugs from its Indian unit, Ranbaxy Laboratories Ltd., will be lifted.

“We definitely must solve the issue,” Nakayama, 60, said in an interview in Tokyo today. “I’m very confident we will solve it. There’s no other way.”

Daiichi Sankyo and Ranbaxy are in talks with the Food and Drug Administration after the U.S. authority blocked the import of more than 30 generic medicines made at two Ranbaxy plants in 2008. The Indian unit derived almost half its sales from the U.S., the largest pharmaceutical market, in the last quarter.

Tokyo-based Daiichi Sankyo rose 1.5 percent to close at 1,584 yen in Tokyo. The shares have declined about 19 percent this year, making the company the fourth-worst performer on the 33-member Topix Pharmaceutical Index, which has dropped 8.8 percent. Ranbaxy shares rose 1.8 percent to 421.3 rupees at 11:30 a.m. in Mumbai.

The FDA in September 2008 blocked the import of more than 30 generic medicines made at two Ranbaxy plants, in Dewas and Paonta Sahib, because of deficiencies in manufacturing processes.

The regulator said in February 2009 that Ranbaxy won’t be allowed to introduce new drugs from the Paonta Sahib factory because of falsified data. U.K. and Australian regulators approved drugs from the plant, located in northern Himachal Pradesh state, after a joint audit.

Awaiting Inspection

Ranbaxy is waiting for FDA officials to inspect the Dewas factory as part of a process to resume drug exports from the plant, it said on Feb. 25. The Paonta Sahib plant remains under the FDA’s Application Integrity Policy list of companies from which the regulator has stopped reviewing drug submissions.

“Ranbaxy is experienced in making medicines at a lower cost and Daiichi Sankyo aims to take full advantage of it after the FDA issue is resolved,” Nakayama said.

Daiichi Sankyo started a unit last month for selling generic drugs in Japan that will utilize Ranbaxy’s cheaper costs, Nakayama said. The company aims to start the operations in October.

Nakayama said he plans to use Daiichi Sankyo’s resources and staff rather than hiring new people in Japan for the unit to reduce costs.

Board Reshuffle

The incoming CEO is replacing Takashi Shoda, who will become chairman, Daiichi Sankyo said on May 12. Nakayama will assume the position on June 28 subject to shareholder approval.

Shoda and senior executive officer Tsutomu Une who serves as Chairman at Ranbaxy, will remain as a board member of the Indian company, Nakayama said. Daiichi Sankyo has a 64 percent stake in Ranbaxy.

Nakayama, currently an executive vice president at Daiichi Sankyo, joined Suntory Holdings Ltd., a Japanese beverage maker, in 1979 after studying bioengineering at Osaka University and completing an MBA at Northwestern University.

He became the head of the biological laboratory at Suntory in 2000 before the company’s drug unit was bought by Daiichi Sankyo’s forerunner Daiichi Pharmaceutical.