The first stop for any pharmaceutical company seeking to be a global player has to be the US, the largest, most profitable and most competitive in the world. Dr Reddy's has successfully entered the US with both Active Pharmaceutucal Ingredients (APIs) and generic formulations. The turnover of Rs 585 crore from the US market is 32 per cent of its total revenue of Rs 1,807 crore in 2002-03.

The company was able to establish its presence in the US with Fluoxetine, and more recently, Ibuprofen. Amlodipine Maleate, its first speciality product, can further consolidate its equity. It is another version of Pfizer's Norvasc and the company has been subjected to litigatioin in the US courts. While Dr Reddy's has won the case in the District court of New Jersey, the company is awaiting a decision from the Federal Court. While the company is confident of winning the case, its speciality business game plan is well under way with another NDA filing with the US FDA.

Apart from the US, Dr Reddy's has a presence in over 50 countries with Russia, China and Europe being the other key markets.

According to the Annual Report 2002-03, the revenues outside India was Rs 1,158 crore, contributing 64 per cent to the total revenues. "The strategy is to sell our product line in new markets. And there in lies the challenge of creating a global brand," according to the Annual Report.

Addressing the shareholders in a note, Dr Anji Reddy, Chairman, said, "Starting with bulk drugs, we used innovation in process development to build a strong and profitable business. This fiscal, the bulk actives business reported a commendable 21 per cent growth in revenue over last year. We then entered the branded finished dosages business in India. Our efforts in this business made it possible for us to bring affordable medicine to the people. The cost advantage we created by innovation brought us very close to the hearts of the people and the doctor community."

Dr Reddy said the company's presence in branded dosages in Russia and the UK deserved mention. The 28 per cent revenue growth in Russia to Rs 167 crore was due to the key brands - Omez, Enam, Ciprolet and Ketorol. In Europe, the acquisition of BMS and Meridien UK raised revenues by 79 per cent to Rs 140 crore.

"Even as we were building a strong base for generic entry in the US, we have taken on the ultimate pharmaceutical challenge - drug discovery research while readying ourselves for the post-2005 era. We started our drug discovery programme in 1993. This November, we will complete 10 years. And what an eventful decade it has been. We now have a pipeline of 7 New Chemical Entities (NCEs), including two in clinical development. Three NCEs - DRF 2725 and DRF 2595 in diabetes and DRF 4158 in cancer -- were outlicensed to MNCs for development. Even though the development of DRF 2725 was discontinued by Novo Nordisk, and DRF 4258 was returned to the company by Novartis, both these molecules have helped strengthen our learning about discovery and development. Meanwhile, DRF 2593 is under development. Our biggest challenge is to take a molecule from our pipeline all the way to the market place cost-effectively and also make it available at an affordable price to the people," Dr Reddy in the letter.

In the short-term, the company's strategy was to build a sustainable US-focused Speciality Business. This would serve as a bridge to the discovery business. "In the long-term, our ability to leverage skills in product identification, drug delivery and formulation will help us create a global Speciality Business. This business will enhance our value by accelerating the creation of a launch platform. Equally important, it will de-risk the discovery business by giving us options should the molecules fail," the Annual report said.

The company was also working towards building its presence in Russia, Brazil, Mexico and China by developing its own field force and marketing select product lines. Simultaneously, the company was trying to expand its presence in Asia-Pacific, Latin America, CIS and West Asia.

Though Dr Reddy's entered the global generic business just three years ago, the sales in generics were closing in on $ 100 million. "But we believe it's only the beginning. Our aim is to become one of the top 10 US generic companies by targeting unique high-value opportunities. To make this possible, we are increasing our portfolio of high margin products and bring in the first wave of product launches. We are also building a commercial front-end in the US and UK markets. And exploring opportunities in Canada and Europe," the report said.