Dr Reddy's Laboratories (DRL), the second largest pharma company in India after Ranbaxy Laboratories, has suffered heavy setback during the fourth quarter and full year ended March 2008 due to sharp decline in generic revenues from North America. The company's net profit declined by 68.4 per cent to Rs 102.8 crore during the quarter ended March 2008 from Rs 325.2 crore in the corresponding period of last year. Its total revenues declined by 14.9 per cent to Rs 1325.2 crore from Rs 1557.3 crore. Revenues from North America generics business went down sharply by 55.4 per cent to Rs 250 crore from Rs 560 crore in the last period.

For the full year ended March 2008, DRL's consolidated net profit declined by 50.2 per cent to Rs 467.8 crore from Rs 932.7 crore in the previous year. The total consolidated revenues declined by 23.2 per cent to Rs 5000.6 crore from Rs 6509.5 crore.

The revenues from APIs declined slightly to Rs 1180.5 crore from Rs 1188.3 crore in the previous year. Its revenues of APIs outside India also declined to Rs 950 crore from Rs 980 crore. Though its APIs sales increased in North America by 88 per cent to Rs 200 crore, its APIs sales in rest of the world declined to Rs 310 crore from Rs 570 crore. APIs sales in Europe touched to Rs 250 crore as against Rs 210 crore in the previous year. The company filed 23 US DMFs taking the total filings to 127. It also filled 9 DMFs in Canada, 13 DMFs in Europe and 11 DMFs in Rest of the World (RoW).

The revenues from generic finished dosages declined sharply by 46.4 per cent to Rs 1780 crore from Rs 3320 crore in the 2006-07. North America contributed 45 per cent and Europe contributed 55 per cent to the generic revenues. The generic revenue in North America declined to Rs 800 crore from Rs 2360 crore in the previous year. The company launched 11 new products (including 2 OTC products) and generated revenue of Rs 61.7 crore. The combined revenues of fexofenadine and finasteride reached at Rs 387.1 crore.

Its revenues in Europe increased marginally to Rs 970 crore from Rs 960 crore. Revenues from betapharm (Germany) reached at Rs 820 crore from Rs 800 crore basically due to higher rebates to insurance companies, pricing pressure and supply constraints. Revenues from UK market remain unchanged at Rs 1400 crore in 2007-08.

DRL has filled 18 ANDAs taking the total filings to 122. Total of 58 ANDAs pending at US FDA addressing innovator sales of $ 78 billion a per IMS December 2007. The company received 20 approvals during 2007-08.

DRL's revenues from international branded finished dosages increased by 16 per cent to Rs 720 crore mainly due to driven by the performance of Romania, Venezuela and other CIS markets. Revenues from Russian market increased by 13 per cent to Rs 410 crore from Rs 360 crore in FY07.

The company's total R&D expenditure reached at Rs 353.3 crore from Rs 246.3 crore in the previous year. This worked out to 7 per cent of total revenues in FY08 as against 4 per cent in previous year. The company received Rs nine crore from R&D partnerships as benefit to the R&D line item as compared to Rs 82.6 crore in the previous year.