BUY OR SELL-Daiichi Sankyo to rebound from rocky Ranbaxy ride?

* Daiichi Sankyo shares nearly halved from 2008 peak

* Ranbaxy management reshuffle is a good sign

* Uncertainties over new drugs, Ranbaxy reputation

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By Yumiko Nishitani

TOKYO, June 10 (Reuters) - Shares in Daiichi Sankyo (4568.T) have nearly halved from a year-ago peak when Japan's No.3 drug maker agreed to buy India's generic drug maker Ranbaxy Laboratories (RANB.BO).

The stock has been hit by a U.S. import ban on some Ranbaxy products, though the shares are up 15 percent from a record low in March. Has the stock factored in all potential Ranbaxy-related woes, and can investors now re-focus on the benefits of the deal?

LONG-TERM PICK-ME-UP

Daiichi Sankyo last month replaced Ranbaxy chairman and CEO Malvinder Singh, a member of the Indian firm's founding family, with its own executive and a Ranbaxy chief operating officer in a bid to resolve problems at the unit, which has been hit by a partial U.S. ban over alleged data falsification. [ID:nBOM425967]

"Daiichi Sankyo's direct involvement in Ranbaxy's management and talks with the FDA should help progress efforts to resolve Ranbaxy's problems with the FDA, which have lingered since 2006," said Mitsubishi UFJ Securities analyst Yasuhiro Nakazawa, referring to the U.S. Food and Drug Administration.

KBC Securities analyst Philip Hall said the reshuffle was positive as there had been issues over Ranbaxy's quality control.

"We're only too aware that holding the stock has been an unpleasant experience over the past year, but we are of the view that the worst is over," Hall wrote in a May 27 report.

Analysts reckon Daiichi Sankyo is the top long-term pick among Japan's drug stocks, with Takeda Pharmaceutical (4502.T) and Astellas Pharma (4503.T) more exposed to the impact of patent expirations on key drugs.

Daiichi Sankyo trades at more than 30 times forecast earnings, nearly triple Takeda's 10.7 and Astellas' 11.2 times, indicating long-term earnings growth expectations.

"Daiichi Sankyo faces several hurdles for the near term, but it's the only major (Japanese) drugmaker that can outgrow (over the long run)," said Nikko Citigroup analyst Hidemaru Yamaguchi.

A BITTER PILL