Dissatisfied with its growth in India and profitability in Europe, pharma-major Dr Reddy's Laboratories Ltd said it is taking measures to “fix and rejuvenate” the situation.
“India is a source of disappointment as the growth has not picked up as expected,” Mr G.V. Prasad, Vice-Chairman and Chief Executive Officer of the company told media persons here on Monday.
While the industry was growing at about 21 per cent, the Hyderabad-based company only posted a 9 per cent growth in its Indian revenue at Rs 350 crore during the second quarter ended September 2011.
Giving details, Mr K. Satish Reddy, Managing Director and Chief Operating Officer said, growth had come down during the last few quarters as some initiatives related to creating separate divisions to focus on major brands like Nice (nimesulide) and Omez (omeprazole) and the expansion of field-force to support the promotion of large brands did not deliver the expected results.
“We have been taking some interventions, the results of which will only be known by the end of the fourth quarter of the current financial year,'' he said.
Similarly, in Europe, revenues declined 10 percent for the quarter ended September, to Rs 210 crore. While Germany has been a long-standing issue, the company top-brass said profitability was an issue in the European market.
SHIFTING FOCUS
In its new chemical research and development, the $1.7 billion company has shifted its focus from cardio-vascular diseases and diabetes to pain management, dermatology and anti-infectives.
The high cost of clinical trials and the plateau seen in diabetes care management, besides the non-availability of large number of patients for clinical trials for cardiovascular drugs and the innovation opportunity in other segments were among the reasons for this, they said.
BIOSIMILARS
Dr Reddy's is also hoping to cash-in on the potential from biosmilars or products that are similar to innovative drugs from biological sources.
“It's a big opportunity. We are preparing for it,” Mr Prasad said.
The company now has four biosimilars in the market while seven other molecules are in the pipeline, he added.
By 2015, biosimilars are expected to reach a market size of $100 billion.
Going forward, Dr Reddy's is betting big on the limited competition and proprietary products, he added.
Further, he added, the year 2012-13 would be a big opportunity for Dr Reddy's as it would scale up generics in the North American market besides an expected higher growth in India and Russia.
Dr Reddy's scrip declined 1.22 per cent on the Bombay Stock Exchange on Monday to end at Rs 1,586.65.