Jan. 28 (Bloomberg) -- Daiichi Sankyo Co., Japan’s third- biggest drugmaker, may forecast a full-year net loss of 284 billion yen ($3.2 billion) after writedowns on its takeover of India’s Ranbaxy Laboratories Ltd., analysts said.

The figure, based on the median estimate of six analysts surveyed by Bloomberg, would be the largest annual loss by a Japanese drugmaker. Daiichi Sankyo had forecast net income of 65 billion yen in October, before it announced the writedowns this month. The Tokyo-based company reports its outlook on Jan. 30.

Daiichi Sankyo has fallen 32 percent, the most among Japan’s largest drug stocks, since Chief Executive Officer Takashi Shoda bid for Ranbaxy in June to enter the market for lower-priced generic medicines. He paid 488.7 billion yen and has written down almost three-fourths of that since the acquisition.

“I fear the loss is only the beginning,” said Yuichi Chiguchi, who helps manage about $8.6 billion in assets, including pharmaceutical stocks, at DIAM Co. in Tokyo. “I don’t see growth yet.”

Maho Tanabe, a spokeswoman for Daiichi Sankyo, declined to comment on earnings or forecasts for the year ending March 31 before their release set for 12:30 p.m. on Jan. 30 in Tokyo. It will be the first of Japan’s top-four drugmakers to report results for October to December.

The market for the lower-priced copies made by the likes of Ranbaxy is expanding at almost twice the pace as for branded originals. New York-based Pfizer Inc., the world’s largest drugmaker, offered to buy Wyeth this week for $68 billion to get access to new medications and offset intensifying generic competition.

Domestic Dependence

Daiichi Sankyo generated 22 percent of sales in the latest business year from Benicar, a pill against hypertension. Takeda Pharmaceutical Co. and Astellas Pharma Inc., Japan’s two largest drugmakers, also made purchases in the past two years to counter an expected sales decline when medicines lose patent protection.

Shoda, who led Sankyo Co. from 2003 and remained CEO after it bought Daiichi Pharmaceutical Co. in 2005, aimed to boost profits at the new company. Net income represented 11.1 percent of sales last year, the narrowest margin among Japan’s top-three drugmakers.

The possible loss for this year would be the company’s first deficit since the Sankyo-Daiichi combination in September 2005. It would dwarf Eisai Co.’s loss of 17 billion yen last year, the largest deficit on record for a Japanese drugmaker.

Ranbaxy was the largest acquisition by Daiichi Sankyo, and the priciest Indian takeover by a Japanese company. Shoda bought Ranbaxy to reduce Daiichi Sankyo’s dependence on its domestic market, which generated 68 percent of sales last year, making it vulnerable to government-imposed price cuts on prescription drugs.

Daiichi Sankyo rose 4.7 percent to 2,025 yen as of the 11 a.m. break today on the Tokyo Stock Exchange. Of 17 analysts tracked by Bloomberg who cover Daiichi Sankyo, 11 recommend buying the stock and 6 say “hold.”

‘Not Bullish’

“We conclude it will take considerable time to realize synergies from the Ranbaxy acquisition and we are not particularly bullish on contributions to medium-term earnings,” Toshihide Yoda, an analyst in Tokyo at Barclays Plc, said in a research report on Jan. 26.

He cut his rating on Daiichi Sankyo to “equal weight” from “overweight” that day, after Ranbaxy posted a loss of 6.8 billion rupees ($139 million) for October to December, hurt by foreign-exchange moves and declining U.S. sales following an import ban. Daiichi Sankyo this month booked 354 billion yen in writedowns for the period related to Ranbaxy.

The Japanese company’s stock slumped 35 percent since the takeover was announced on June 11 to yesterday’s close. The U.S. Food and Drug Administration banned imports of more than 30 of Ranbaxy’s drugs in September on concern about manufacturing deficiencies, exacerbating the company’s stock slump as equity markets worldwide declined amid a worsening credit crisis.

While Daiichi Sankyo paid 737 rupees a share for its 64 percent stake in India’s largest drug company, Ranbaxy’s stock had lost 66 percent of its value by the Dec. 31 close in Mumbai trading. It has fallen a further 21 percent this year.

To contact the reporter on this story: Kanoko Matsuyama in Tokyo at kmatsuyama2@bloomberg.net.

Last Updated: January 27, 2009 23:00 EST