Dr Reddy’s announced its unaudited financial results for the quarter ended December 31, 2003. Revenues at Rs 5.1 billion as against Rs 4.3 billion in Q3 FY03; YoY growth of 18 per cent and revenues outside India at Rs 3.5 billion as against Rs 2.8 billion in Q3 FY03; YoY growth of 25 per cent, which contributed 68 per cent to total revenues as against 64 per cent in Q3 FY03.

In the branded formulations segment, revenues outside India increased by 34 per cent to Rs 912 million as against Rs 679 million in Q3 FY03; contributed about 47 per cent to the segment revenues driven primarily by the growth in Russia by 39 per cent to Rs 615 million. Revenues in Europe at Rs 779 million as against Rs 323 million in Q3 FY03; YoY growth of 142 per cent. The growth has been driven primarily by the sales of Ramipril in Europe API segment, which recorded sales of Rs 465 million. R&D investments increase by 59 per cent to Rs 516 million as against Rs 325 million in Q3 FY03. As a per cent of revenues, R&D expenditure is at 10 per cent as against 7.5 per cent in Q3 FY03.

The company filed 6 Drug Master Files (DMFs) during the quarter, the highest from India. This takes the cumulative DMF filings to 50. The company has submitted 4 ANDAs with Para IV certifications, taking the total ANDAs pending at the US FDA to 31. Of these, 23 include patent challenges. As in the earlier quarters, the company’s investments in patent challenge projects and human resources remain a significant factor for the increase in selling, general & administration expenses.

The net income is at Rs 592 million (12 per cent of total revenues) as against Rs 661 million (15 per cent of total revenues) in Q3 FY03. This translates to a diluted EPS of Rs 7.72 as against Rs 8.63 in Q3 FY03.

In the case of Active Pharmaceutical Ingredients (APIs), revenues were at Rs 1.9 billion as against Rs 1.5 billion in Q3 FY03, a YoY increase of 32 per cent. Growth has been primarily driven by Europe and India. Revenues from overseas markets have been at Rs 1.4 billion as against Rs 1 billion in Q3 FY03, a YoY increase of 31per cent. North America and Europe together contributed about 53 per cent to the total revenues of the APIs segment. Revenues from Europe increased to Rs 534 million as against Rs 59 million in Q3 FY03. This increase was driven by the sales of Ramipril, which contributed Rs 465 million in revenues.

Revenues in India increased by 34 per cent to Rs 538 million driven by volume growth in the company’s key products. Revenues from North America declined to Rs 491 million as against Rs 589 million in Q3 FY03. This decline was primarily on account of decline in revenues from Nizatidine. The company has filed 6 US DMF during the quarter, taking the total filings to 50.

In the generics front, revenues had been at Rs 1 billion as against Rs 998 million in Q3 FY03; YoY growth of 6 per cent, driven primarily by the growth in North America. Revenues from North America recorded a growth of 16 per cent to Rs 856 million, which contributed 81 per cent to the segment revenues. Revenues from fluoxetine capsules 40mg in North America increased by Rs 63 million to Rs 420 million as against Rs 357 million in Q3 FY03. Revenues from Tizanidine tablets 2 & 4 mg in North America declined by Rs 89 million to Rs 134 million as against Rs 223 million in Q3 FY03. Tizanidine was launched in Q3 FY03. New products launched in North America in the last 12 months including Ibuprofen and Nefazodone contributed Rs 102 million to the segment revenues.

Revenues from Europe declined to Rs 198 million from Rs 247 million in Q3 FY03. The decrease was largely on account of the decline in revenues from Omeprazole due to increased competition. Omeprazole was launched in UK in Q3 FY03. During the quarter, the company submitted 4 ANDAs with Para IV certifications, taking the total ANDAs pending at the US FDA to 31.

Revenues of branded formulations in international markets increased by 34 per cent to Rs 912 million over Q3 FY03. Growth has been driven primarily by Russia; international revenues contributed 47 per cent to branded formulations segment. Revenues from branded formulations in Indian market remained flat at about Rs 1 billion compared to Q3 FY03. Growth in key brands of Omez, Stamlo Beta and Gaity was offset by the decline in revenues from other key brands such as Ciprolet. In addition, year on year growth comparisons are also impacted due to the product rationalization program carried out earlier this fiscal.

Revenues from the oncology & biotechnology segment increased to Rs 150 million from Rs 126 million in Q3 FY03. This increase was driven primarily by the sales in Brazil, which contributed Rs 60 million in revenues. This was however, offset by the discontinuance of trading operations in diagnostics business effective April 1, 2003, which contributed Rs 34 million in revenues in Q3 FY03. Revenues from the custom chemical services segment remain unchanged at Rs 9 million.