The Hyderabad-based Dr Reddy's Laboratories (DRL), the second largest pharma company in India with consolidated net sales of Rs 6,790 crore, is busy reorganising its business to emerge as a strong player both in India and abroad.
As part of the reorganisation, the company is learnt to close down its Atlanta Research facility in the US. This leading Indian drug maker is also shifting part of its drug discovery operations to Bangalore-based Aurigene, its wholly owned independent subsidiary from Hyderabad. Aurigene is a partnership drug discovery biotech company.
Besides, DRL is creating a new group to focus on proprietary products development, which will be responsible for building the proprietary, branded research and development (R&D) portfolio in collaboration with various partners and service providers. This organisation will work with Aurigene and other discovery biotechs to ensure effective management of the ongoing and future drug discovery programme.
The company management is also implementing changes in global generic marketing strategy to focus on certain key geographies and exists from the very small distributor driven markets. As part of this move, Dr Reddy's is planning to exist from markets which are contributing only one per cent to its sales. The company has a very strong base in US, Russia and Commonwealth of Independent States, Germany and India. DRL notched up sales of over $150 million from Russia and CIS countries during 2008-09.
R&D FOCUS
The company's R&D expenditure for the year ended March 2009 went up 18.7 per cent to Rs 409.27 crore from Rs 344.71 crore in the previous year. This worked out to 6 per cent of total revenues as against 7 per cent in the last year. The drug maker also launched 116 new generic products and filed 110 new generic product registrations.
While the company filed 55 Drug Master Files (DMFs) globally, it submitted 20 Abbreviated New Drug Applications (ANDAs) in US taking the total filings to 144 at the end of 2008-09. This shows that the company is set to dominate the international market in coming years. Dr Reddy's launched 16 new products in US, while it launched 25 new products and filed 11 dossiers across Europe.
DRL, which launched Nexret for topical anti-acne segment and Redispur for the treatment of secondary hyperparathyroidism due to chronic kidney disease in India, has recently received approval for three investigational new drugs (INDs) for the treatment of dyslipidemia, atherosclerosis and associated cardiovascular diseases, and COPD.
KEY GROWTH ENGINES
DRL has established a strong presence in US, Europe and Russia with its generic drugs. During 2008-09 its revenues from global generics business reached at Rs 4980 crore as compared to Rs 3300 crore in the previous year, a strong growth of 51 per cent, mainly on account of launch of authorised generic version of GSK's Imitrex (generic version of sumatriptan succinate). The company achieved 58 per cent growth in North America (excluding revenues for Sumatriptan) with better growth in existing products, acquisition of Shreveport facility and the benefit of rupee depreciation against dollar.
DRL's revenue from Europe reached at Rs 1190 crore from Rs 1020 crore, representing a growth of 16 per cent. Its revenues from Betapharm, Germany, increased by 20 per cent to Rs 990 crore from Rs 820 crore mainly on account of volume growth of 16.5 per cent as against market volume growth of 3.2 per cent. However, revenue from rest of Europe remained flat at Rs 190 crore.
Its revenues from Russia and other CIS markets represented strong growth of 38 per cent to Rs 760 crore from Rs 550 crore in the previous year. Its revenues from Russia alone went up by 43 per cent to Rs 590 crore due to higher sales of brands of Omez, Nise, Ketaral, Cetrine and Bion. During 2008-09 DRL's revenues in India increased only by 5 per cent during 2008-09 to Rs 850 crore from Rs 810 crore based on IFRS basis.