The year 2002 was a sweet and sour year for Dr Reddy's Laboratories, according to G V Prasad, Executive Vice-Chairman and Chief Operating Officer (COO). While the news of ragaglitazar and omeprazole were slightly sour, the company's performance in some of the generics such as fluopxetine, tizanidine and others were the sweeteners. Of course, the month of December will be a landmark for the company because of the favourable court decision in the amlodipine maleate case. The ruling represents a significant milestone in the execution of the company's US speciality business strategy.

The speciality business will be a vital link in the company's transformation from a diversified generic pharmaceutical company to a discovery-led global pharmaceutical entity. All in all, the year ended perfectly with a reason to cheer. “ We are both confident and excited about our future as we march into 2003, with the overall vision of becoming a discovery-led global pharmaceutical company,” Prasad wrote in a personal article in a newspaper in Hyderabad.

Dr Reddy's, the second biggest drug maker in the country, had set a target of about $50-60 million US generic drug sales. But it hopes to cross that target with a huge margin because of revenue from fluoxetine, its own version of the anti-depressant drug Prozac. Last year Dr Reddy's revenue from generic drug sales amounted to Rs 406 crore because of fluoxetine, which contributed 81 per cent of the generic drug sales. The company started selling 40 mg fluoxetine capsules in August 2001 after challenging Eli Lilly's patents exclusivity ended in February 2002.

When rivals entered the market everyone thought prices would fall significantly, but that was not the case. The company started off with the expectation of $50-60 million in sales, but it would cross that target with a huge margin.

Dr Reddy's also expects to boost sales of tizanidine, a muscle relaxant. The 2mg and 4mg hydrochloride tablets are doing well in the US market. The company had a third of the market for tizanidine in the US. It plans to launch the anti-inflammatory drug ibuprofren soon in the US market.

The success in the case against Pfizer is going to change the fortunes of Dr Reddy's in a big way. The US District Court of New Jersey has dismissed Pfizer's complaint on the ground that the patent term extension does not cover Dr Reddy's amlodipine maleate. The decision of the US court is expected to pave the way for Dr Reddy's to tap the US market with its own branded product. Following the court verdict, the company plans to launch the product in August 2003, upon the expiry of Pfizer's pediatric exclusivity and receipt of a final FDA approval for its new drug application. If FDA approves it as a new drug, Dr Reddy's will have three years exclusivity which will be a significant milestone for the company's US speciality business strategy. Amlodipine maleate is slightly different from Pfizer's Norvasc hypertension and angina drug, whose active pharmaceutical ingredient is amlodipine besylate. According to Dr Anji Reddy, Chairman of Dr Reddy's, amlodipine is the drug to watch for, more than fluoxetine or omeprezole. The amlodipine market is worth $ 2.4 billion.

The company also suffered a couple of reverses during the year. It failed to win a six-month exclusive marketing right for its 40mg omeprezole tablets against AstraZeneca's $ 5.7 billion Prilosec indicated for heartburn. The court found patent infringement by Dr Reddy's and three other companies. The company hopes to market omeprezole again after AstraZeneca's patent expires in March 2003.

But the major setback came when Novo Nordisk suspended clinical trials of ragaglitazar, a diabetes drug developed by Dr Reddy's Laboratories, after the drug was found to cause bladder tumours in some rats and a mouse. Ragaglitazar (DRF 2728) was outlicensed to Novo Nordisk in 1998. But medical research involves such risks. In any case, the final word has not yet come as to the fate of the molecule. Despite the reverse, DRL is developing biotech drugs with focus mainly on cancer. The drugs are in different stages of development.