The first quarter of the current financial year has brought cheer to pharma major Dr Reddy’s Laboratories Ltd as its growth story in the domestic market has recorded a fifth straight quarterly increase in revenues.
The revenue grew by 19 per cent at ₹476 crore, outpacing industry growth. It is reaping the fruits of measures which have been put in place in recent years, according to its Chief Financial Officer Saumen Chakraborti.
The company has strengthened its domestic sales force besides an innovative product portfolio. Efforts to ramp up domestic business further will continue with measures such as forging new in-licensing deals. The company is also speaking to a ‘lot of players’ in this regard, he says.
The UCB integration is also an immediate priority. Last month, Dr Reddy’s completed the acquisition of select portfolio of established brands of Belgian firm UCB in India, Nepal, Sri Lanka and Maldives for ₹800 crore. This will accelerate its presence in high-growth areas of dermatology, respiratory and paediatrics diseases with market-leading brands such as Atarax, Nootropil, Zyrtec and Xyzal.
The proprietary product pipeline is stronger, which might auger well in the North-American market going forward. It is sitting pretty on about $150 million market potential with reference to its three Abbreviated New Drug Applications (ANDAs).
It had already received the Prescription Drug User Fee Act dates for the drugs. PDUFA allows the Food and Drug Administration to collect fees from drug manufacturers to fund new drug approval processes.
“If all goes well, DRL may be able to launch some or all of these novel drugs in FY 2017 which could be a material driver for the US business,” says an analyst report of IDFC.
The total R&D expenditure for FY 2016 could be around 12 per cent, out of which about 35 per cent might go to bio-similars and proprietary products. However, the expected growth in the US is subjected to speed of new-product approvals and any delay will deter performance.
Dr Reddy’s scrip gained two per cent on Monday on the BSE to end at ₹4,146.85.