June 27 (Bloomberg) -- Ranbaxy Laboratories Ltd. Chief Executive Officer Malvinder Singh plans to release an exclusive low-cost version of a blockbuster medicine every year for the next five after challenging patents held by drugmakers including Bristol-Myers Squibb Co.

Ranbaxy, India's second-biggest drugmaker, began selling a generic copy of Bristol-Myers' Pravachol cholesterol pills this month after securing monopoly rights in the U.S. The new drugs will spur 20 percent sales growth this year, Singh, 34, said.

``This is a big confidence booster, as we now know that anything from acquisitions later will be a bonus,'' said K.K. Mital, who manages the equivalent of $37 million in shares at Escorts Asset Management in New Delhi. ``The company must be pretty confident about the prospects of the medicines it has in the pipeline.'' Mital may add to the 26,000 Ranbaxy shares he already owns.

Ranbaxy, Dr. Reddy's Laboratories Ltd. and Teva Pharmaceutical Industries Ltd. compete in the U.S. and Europe to be the first to win the right to sell low-cost generic medicines. More than 80 drugs with combined U.S. sales of $95 billion will lose patent protection over the next six years, according to equity research company Cowen & Co.

``In the U.S., we have close to 90 pending approvals,'' Singh said in an interview in the company's headquarters in Gurgaon on the outskirts of New Delhi. ``Some of these products should come with exclusive rights.'' About 20 of these drugs are candidates for exclusive marketing rights.

Missing The Merck

New drugs may help Singh meet his sales target without the need to acquire Indian or overseas rivals after Ranbaxy missed out in the race for Merck KGaA's $6.6 billion generic-drug unit. India's 10,000 drug and ingredient makers need to consolidate because prices are the lowest in the world, Singh said.

``There will be a shakeout,'' he said. ``It is certainly overdue.''

Ranbaxy built a $1.34 billion business in three decades by copying drugs such as Merck & Co.'s Zocor cholesterol medicine and selling them for a fraction of the price in the U.S. and Europe. Singh is applying to sell dozens more generic drugs to almost quadruple revenue to $5 billion by 2012.

First To File

The U.S. Food and Drug Administration grants six months of exclusive marketing rights to the drugmaker that is the first to successfully challenge a patent. The six-month period is the most lucrative for the generic supplier because prices plunge when other drugmakers start selling rival versions.

Over the past six years, Ranbaxy has won rights for five drugs, ranging from anti-virals to cholesterol treatment.

Last year, Ranbaxy won exclusive rights to market 80 milligram tablets of simvastatin, a drug used to lower the level of cholesterol. In 2002, the company won similar rights to sell 125 milligram, 250 milligram and 500 milligram tablets of cefuroxime axetil that's used to treat infections of the chest, the urinary tract or the skin.

In 2003, the Indian company was also the first to sell ganciclovir, a drug given to AIDS patients.

Pfizer Inc.'s Norvasc blood pressure medicine and GlaxoSmithKline Plc's Coreg heart disease pills are among brand- name drugs with total annual sales of $6.9 billion whose patents are due to expire this year.

Singh, ranked with his brother Shivinder on Forbes' list of billionaires, was an investment banker at Merrill Lynch & Co. before joining the company created by his family in 1961.

Since becoming CEO in 2006, Singh has overseen nine acquisitions worth at least $400 million, including South Africa's Be-Tabs Pharmaceuticals and Romania's Terapia S.A, according to data compiled by Bloomberg.

Singh in May withdrew from the bidding for Merck's generic- drugs unit before Mylan Laboratories Inc. paid 4.9 billion euros ($6.6 billion). Ranbaxy will rely more on existing businesses and exclusive generic-drug releases to achieve its sales targets than acquisitions, he said.

``There is an element of acquisitions in this, but it is not significant,'' Singh said.

To contact the reporters on this story: Ashok Bhattacharjee in New Delhi at ashokb@bloomberg.net; Stephen Foxwell in New Delhi at sfoxwell@bloomberg.net.

Last Updated: June 27, 2007 01:43 EDT