Ranbaxy faces new US regulation woes

Updated 22 September 2013
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Ranbaxy faces new US regulation woes

MUMBAI: Shares in Indian generic drugs giant Ranbaxy Laboratories crashed by as much as 35 percent on Monday after the US Food and Drug Administration suspended imports from one of its factories.
The FDA issued an alert recently against the factory at Mohali in the northern state of Punjab, spelling more bad news for Ranbaxy which is struggling to live down a nearly decade-long history of US-led regulatory action.
Ranbaxy, one of the world’s biggest generic drugs makers, slid 34.99 percent to a day’s low of 297.25 rupees on the Bombay Stock Exchange in early trading.
By the end of the day, some brokerage firms had downgraded the stock, citing concerns over the future of the Mohali plant.
Shares closed down 30.27 percent at 318.85 rupees.
A spokesman for Ranbaxy, which was bought by Japan’s Daiichi Sankyo group in 2008, said “the company has so far not received any communication from the US FDA” and it was seeking information.
The FDA website did not explain the reasons for the “import alert.”
In May, Ranbaxy pleaded guilty to US charges of selling adulterated antibiotic, acne, epilepsy and other drugs and agreed to a record $500 million fine. The episode was a huge blow to its image.
The US fraud, uncovered over eight years, was exposed by a whistle-blowing ex-employee who said Ranbaxy created “a complicated trail of falsified records and dangerous manufacturing practices.”
Ranbaxy imported adulterated batches of drugs made in its Paonta Sahib facility near the Indian city of Chandigarh, which FDA inspectors said had poor record-keeping and inadequate testing for the stability of the drugs over time.
The company also admitted making false and fraudulent statements to the FDA in 2006-2007 about stability tests on several other export drugs.
The Paonta Sahib facility and another at Dewas in central India were blacklisted from producing drugs for the US market.
Ranbaxy is not alone in facing scrutiny from global regulators because of problems at its factories.
In July Britain’s health care regulator recalled 16 drugs from Indian pharmaceutical firm Wockhardt after finding deficiencies at one of its plants in western India.
“The import alert could be a huge setback for Ranbaxy Labs,” said Sarabjit Nangra, pharma analyst with Mumbai’s Angel Broking, adding that import alerts can take months to resolve.
Ranbaxy will for now have to rely on its New Jersey-based Ohm Labs to service all its US business, Nangra said.
Sriram Rathi of Anand Rathi Research, which downgraded the Ranbaxy stock from a “buy” to “sell” rating after the alert, said there could also be delays in new product launches.
The US is the world’s biggest drugs market and accounts for about 40 percent of Ranbaxy’s revenues.
India’s government has been forced to defend the country’s lucrative generic drug industry, which accounts for nearly $15 billion in annual exports.
The country has built a reputation as the “pharmacy to the world” for its production of life-saving generic versions of medicines for poor nations that cost a fraction of those with brand names.


INTERVIEW: Karim Sabbagh, DarkMatter CEO - why digital security threats are key issue for governments and businesses

Updated 24 February 2019
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INTERVIEW: Karim Sabbagh, DarkMatter CEO - why digital security threats are key issue for governments and businesses

LONDON: Cybersecurity looks like becoming the big theme of this year, and maybe for many years to come.

In a survey in January by the World Economic Forum, the threat of cyberattack was mentioned as one of the most serious global threats by business leaders; in the Middle East it was an especially worrying concern, second only to the oil price as a perceived risk.

For Karim Sabbagh, that is both a worry and a business opportunity. “The impact on economies and societies is huge. One of the challenges we have as captains of industry and as citizens is that we’re fascinated by the ability we have to digitize things in our day-to-day lives. But the sad part is that for every dollar we spend on new digital enablement, we’re not spending enough on cybersecurity,” he said last week on the sidelines of the IDEX defense exhibition in Abu Dhabi.

Sabbagh is CEO of DarkMatter, the Middle East’s home-grown digital security firm. Amid the guns, tanks and desert camouflage gear at IDEX, he explained to Arab News why we should all be taking the threat of cyberattack much more seriously, and spending a lot more money to defend against it.

“I can show you a demonstration in our booth. I can interfere with your transport network, your airport operations or your power grid. All these things aren’t fiction, they’re all for real,” he said against a backdrop of simulated warfare displays in the UAE’s big defense show.

“The people with bad intent will continue to evolve their techniques and their approaches. So the question isn’t how do I completely eliminate the known risks, but how can I prepare for threats in the future.”

The “people with bad intent” are enemy governments, industrial spies, ransom seekers, or people who “subscribe to a cause,” he said.

“From what we’ve seen … state-led attacks were the most prevalent. In private organizations, it was more about accessing data and using that data for your own commercial benefit,” he added, leaving the distinct impression he knew far more than he was willing to say publicly.

DarkMatter has been in business since 2015, the brainchild of Faisal Al-Bannai, the Emirati entrepreneur probably best known for the Axiom chain of telecom stores he has made into one of the best-known names in Middle East retail.

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BIO

Born
•Beirut 1963

EDUCATION
•BA and MBA, American University of Beirut
•American Century University, New Mexico, US

CAREER
•Regional director for strategy, Leo Burnett Middle East
•Senior vice president, Booz & Co.
•President and CEO, SES
CEO, DarkMatter

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“He’s the single shareholder, and what he does is quite unique,” Sabbagh said. “Faisal is an entrepreneur, very driven and very passionate, with all the traits you’d like to see from entrepreneurs. He likes to see things through, and has a very long-term view.”

Sabbagh became CEO of the company last year after a stint with SES, a Luxembourg-based firm that provides satellite communications services to the US and other Western governments.

Before that, Lebanon-born Sabbagh worked for many years in the UAE and Saudi Arabia as a partner at management consulting firm Booz & Co., specializing in telecommunications and media.

He takes a broad view of the digital communications business in the five business sectors DarkMatter serves.

“How do I come up with technologies, devices and applications that can give me peace of mind that communication on these devices is secure? As we were doing work on those things, we also started engagement in areas concerning digital transformation, and questions about how the government provides new services that are digitized to all its citizens and residents,” he said.

A key part of DarkMatter’s work is the interaction of humans with technology. Sabbagh cites a recent cyber-attack in Singapore, in which the country’s medical records were accessed and compromised.

After a lengthy audit, the authorities discovered there were two main reasons. One was that on the network there were patches and fixes that weren’t done. So there was something that belonged to the realm of known vulnerability that wasn’t attended to,” he said.

“The second one was human capital. Through human intervention that attack was enabled, not by design but by accident. It boils down to technology and humans, the story of humanity since we invented fire.”

Why is the threat of cyberattack so high up the list of concerns for the Middle East? Sabbagh examined this in a work he co-authored in 2008 entitled “Oasis Economies,” which examined the social tensions created in traditional Arab societies going through the modernization process. He feels the lessons then still apply today.

“My conclusion is that as you try to liberalize economies but try to preserve the social safety net, as you try to liberalize the way people go about their daily lives while preserving the culture, you’re constantly trying to manage these tensions,” he said.

Highly digitized and progressive Arab youths live side by side with more conservative forces, he added.

Smart nations and smart business can’t be truly smart unless they secure their communications.

Karim Sabbagh, DarkMatter CEO

“In one family, even one household, you move from a very traditional way of living to the kids being astrophysicists, building probes to land on the moon. I’m not exaggerating,” he said.

“We have a highly digitized young population, not like the ageing populations of the West. These digital tools are available to them and they can be very productive, but if used inadequately they can be very harmful. So it doesn’t surprise me that the awareness around cyber threats in the region is very pronounced, and rightly so.”

These issues are especially pronounced in Saudi Arabia, which is going through the rapid transformational process of its Vision 2030 reform plan.

The modernization strategy involves the creation of a series of hi-tech hubs such as NEOM, the $500 billion megaproject involving a highly automated conurbation in the Kingdom’s northwest.

“In the old world, the industrial technology and the information technology operated in two different environments, but today there’s a big intersection between them,” Sabbagh said.

“The bigger the intersection the more efficient these businesses are, but the downside is that there’s a bigger attack surface from a cybersecurity standpoint. So the more countries such as Saudi Arabia advance their digitization processes, the more advanced they’ll become, but the downside is that the attack surface expands.”

The solution, he believes, is “defense, defense, defense” against cyberattack. “The best attack is defense,” he added.

Expansion of DarkMatter into Saudi Arabia is one of the priorities for later this year, moving the firm outside its UAE base and complementing existing business centers in Canada, Finland and India. “Saudi Arabia is probably one of the markets we’ll look at very closely,” he said.

One line of defense Sabbagh unveiled at IDEX was the new version of DarkMatter’s successful Katim phone, an ultra-secure and virtually indestructible mobile device that the firm is aiming at the defense, energy and government sectors.

The first version of the device was a big commercial success, but the second is designed to operate in even more hostile environments, with the promise of total data security.

“It’s designed to military standards in terms of ruggedness. Our engineers ran over it in a truck, and I wasn’t amused until they showed me a video of the phone working afterward,” he said.

“You can immerse it in water for 30 minutes and it still works. If the phone detects any attempt to try to interfere with it, either physically or via software, the data stored on it will automatically self-destruct. It’s a leap forward for us,” he added, emphasizing the “quantum resistant crypto protocols” that DarkMatter uses.

What do governments, always protective of data security, think of the new device? “The government is one of the users, as well as businesses where you have critical infrastructure being deployed,” he said.

Sabbagh summed up DarkMatter’s essential business philosophy: “Smart nations and smart business can’t be truly smart unless they can secure their communications. If they aren’t secure I can access their communications, hack them and interrupt their operations. People can give me all the smart slogans they want, but if I can hack you and interrupt your information, that’s not a very smart proposition.”