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DR REDDY'S
LABORATORIES
LIMITED
Dr. Reddy's Laboratories is one of the largest research-driven pharmaceutical companies in India. Background
Dr. Reddy's Laboratories is a vertically integrated, global pharmaceutical company with proven pharmaceutical company in India, Dr. Reddy's pharmaceutical products in India and overseas.
Founded by Dr Anji Reddy, an entrepreneur- In the same year, Reddy US Therapeutics, a wholly- scientist, in 1984 at Hyderabad, the company owned subsidiary, was established at Atlanta, US to produces finished dosage forms, API, diagnostic kits, conduct target based drug discovery.
critical care and biotechnology products.The company has over 190 finished dosages and 60 API In 2002, it made its first overseas acquisitions and Laboratories Limited and Meridian Health Care In 1986, Dr. Reddy's entered the international (UK) Limited.The two firms produce oral solids markets with exports of Methyldopa. In 1987, it and liquids. In 2003, Dr Reddy's set up a joint obtained its first US FDA approval for Ibuprofen venture with Venturepharma in South Africa called API and started its formulations operations. In Dr Reddy's Laboratories (Proprietary) Ltd, South 1988, the company acquired Benzex Laboratories Africa to establish its presence in the Southern Pvt. Limited to expand its bulk actives business. Dr.
Reddy's raised a GDR issue of US$ 48 million in countries and sub-Saharan African territories.The 1994 and laid the foundation stone for a finished company has six US-FDA inspected plants. In dosages facility to cater to the highly regulated November 2005, the company entered into a markets such as USA. In the year 2000, the definitive agreement to acquire Roche's API company merged with Cheminor Drugs Limited.
business at the state-of-the-art manufacturing site Products
Established
Distribution
Production plants
Key Products
2003. Sales of Ramipril amounted to over 6.5 per cent of the total company revenues in 2004. Other Category
major sellers for the company's API business included ciprofloxacin, ranitidine hydrochloride, naproxen sodium and ibuprofen. In 2005, branded formulations accounted for 40 per cent of total sales, API accounted for 36 per cent of total sales while generics accounted for 18 per cent of total sales.The company's API division reported filing 16 DMF with the US FDA in 2004.This took the total number of DMF on file in the US to 56, and the company filed a further 9 during 2005. Dr Reddy's Source: IMaCS Analysis
ciprofloxacin, fluconazole and citalopram.
in Cuernavaca, Mexico including all employees and Dr Reddy's generic formulations business has been operational since 1998. In 2005, Dr Reddy's filed 13 Foreign Investors are the largest shareholders pipeline included 45 ANDA pending approval with in the company (46.77 per cent equity stake) the FDA. Of these, the company reported that 9 followed by the promoters (26.29 per cent contained Paragraph IV certification. Dr. Reddy's of the equity stake). Mutual funds, financial plans to maintain its momentum by filing between institutions and other institutions hold 13.15 per cent equity stake and non-promoter corporate hold 1.42 per cent of the equity stake.The public Financial Analysis
While Dr. Reddy's witnessed a healthy growth rate Products and Brands
in its revenues between 2001 and 2004, the year 2005 was a difficult one for the company. Revenues Dr. Reddy's manufactures API and finished dosage declined in rupee terms (though in dollar terms forms and markets them globally, with a focus on there was a slight increase) which resulted in a United States, Europe, India and Russia. In addition, the drug discovery arm of the company conducts cardiovascular, inflammation and bacterial infection.
formulations are well established with an impressive track record of growth and profitability.The generics business started operations in 2001 and focuses primarily on the North America and EU markets.
The company's current best selling API product is Ramipril, first introduced in non-US markets in Dr. Reddy's has been a pioneer in establishing the presence of Indian pharma in the global arena. In 1990, Dr. Reddy's became the first Indian ciprofloxacin to Europe and Far East. In 1991, first formulation exports to Russia were commenced.
Dr. Reddy's started its drug discovery programme in 1993 and within three years it achieved its first breakthrough by outlicensing an anti-diabetes molecule to Novo Nordisk in March 1997. By licensing the anti-diabetic molecule, DRF 2593 (Balaglitazone), to Novo Nordisk, Dr. Reddy's significant reduction in PAT.This has been largely became the first Indian pharmaceutical company to due to intense competition and severe pricing out-license an original molecule.The same year, it pressures in the U.S. generic markets for two of its also filed its first ANDA with the US FDA for key products, fluoxetine and tizanidine, and in Ranitidine. In 2001, the company was the first Europe for its API ramipril. Although Dr Reddy's Indian pharmaceutical company to obtain 180-day launched several products across its various exclusive marketing rights for a generic drug in the businesses, none was significant enough to offset US market with the launch of fluoxetine 40 mg the decline in overall generics and API businesses.
The profitability ratios and return indicators have The company has joint ventures and subsidiaries in a number of countries, including Brazil, China, Profitability has been negatively impacted in the Russia, United Kingdom, and the United States. Dr past few years as a result of the company's increase Reddy's also has representative offices in in research and development (R&D) expenditure Kazakhstan, Romania, Sri Lanka, Ukraine and and long-term investment activities to enhance its Vietnam.The products manufactured by Dr. Reddy's pipeline and other infrastructure.The expenditure on R&D has been continuously increasing as the organisations in the healthcare industry. It has been company stresses on innovation for growth. R&D successfully exporting its products to over one expenditure as a percentage of total turnover hundred countries world-wide, including the USA, increased from 5 per cent in 2002 to over 18 per UK, Switzerland, Germany, Spain, Italy and the Dr. Reddy's contribution in making
Dr. Reddy's entered the global generic market with ‘Made in India’ global
exports of Ranitidine-75 mg and Fluoxetine to North America. In 2001, the company entered into The company enjoys a strong presence in USA, an exclusive co-marketing and development Western Europe, Russia and India.While India agreement with Par Pharmaceuticals Inc. covering accounted for 35 per cent of total turnover in 2005, fourteen generic pharmaceuticals products to USA accounted for 22 per cent of total turnover.
strengthen the company's position in the US Russia and CIS accounted for 15 per cent of sales generic market and to get a substantial cost while Europe accounted for 14 per cent of sales.
advantage on account of its vertical integration capabilities. In 2003, Dr Reddy's entered into an providing for the strategic investment by Dr.
exclusive 15-year product development and Reddy's to acquire 100 per cent of betapharm marketing agreement for OTC products with Group, Germany for 480 million in cash.
Factors fuelling Dr. Reddy's global
In 2003, Pliva signed an agreement with Dr Reddy's initiatives
for development and marketing of 11 oncology products. Dr Reddy's would be responsible for Aiding the company's growth is Dr. Anji Reddy's developing the API and preparing the DMF for the passion for research and drug discovery and his products, whilst Pliva would be responsible for vision to establish India's first discovery led global formulating the products and filing the necessary pharmaceutical company.Today, the company has marketing authorisation applications. Pliva would over 950 scientists working across the globe, have the exclusive marketing rights for 11 Central around the clock. Dr. Reddy's actively pursues a and East European countries, while Dr Reddy's basic research programme and focuses on cancer, gained an opportunity to enter this market.
diabetes, bacterial infections and pain management.
The company has several pharmaceutical products In September 2005, Dr Reddy's entered into a co- development and commercialisation agreement with Denmark's Rheoscience AG involving a In fact, Dr. Reddy's was able to establish itself as a diabetes drug.The agreement, over balaglitazone, supplier of high quality pharmaceuticals very early will involve Rheoscience funding all costs for the on in the global market. In 1988, the company's Phase III clinical trials, while Dr Reddy's will process for Ibuprofen, a popular anti-inflammatory drug, was so advanced that Ethyl Corporation, US, development costs. In turn, Rheoscience will obtain had to accept its superiority in front of the US the marketing rights to the EU and China, while Dr Trade Representative and ask for tariffs to be put Reddy's will garner the marketing rights for United against Dr. Reddy's to achieve a level playing field.
States and rest of the world.The agreement will Dr. Reddy's started its drug discovery programme cover a period of 10 years from commercialisation.
in 1993 and within three years, it achieved its first breakthrough by outlicensing an anti-diabetes In 2005, the company entered into a definitive molecule to Novo Nordisk in March 1997.With agreement to acquire Roche's API business in this significant step, the Indian industry went Cuernavaca, Mexico, including all employees and through a paradigm shift in its image from being business supply contracts.The total investment outlay is about US$ 59 million including working capital.This business involves the manufacture and sale of API including intermediates to Roche and other innovator companies.This acquisition adds unique steroids manufacturing capabilities to Dr.
In February 2006, Dr. Reddy's and 3i, Europe's leading private equity house, jointly announced that they had entered into a definitive agreement known as just 'copycats' to 'innovators'.Through its R&D and creation of successful IPRs. Dr. Reddy's success, Dr. Reddy's pioneered drug discovery in has also been taking adequate measures on this Future plans
Dr Reddy's acquisition of betapharm gives it a strong presence in Europe and it will target 60 per Dr Reddy's is taking steps to grow its business cent of the pharmaceuticals expected to lose across regions, and expects Brazil, Europe and India patent protection between 2002 and 2008. Dr.
to emerge as the key growth drivers in the next Reddy's has also roped in venture capitalists and few years and is thus focusing aggressively on these set up a separate integrated drug development markets. It is very positive on growth prospects in company called Perlecan Pharma with an aim to Russia as well, with price realisations being better mitigate the risks involved in drug research, reduce in Russia (sells branded formulations) than in the R&D expenses and push up overall future Dr Reddy's recent US$ 59 million acquisition of Roche's API business in Mexico will help it jump- start its plans for the custom pharmaceutical services (CPS) business.The CPS business involves providing solutions to innovator pharmaceutical companies right from the time a potential drug molecule is in the research stage till the product reaches the market.The acquisition provides an opportunity for the company's CPS business to grow ten-fold to US$ 100 million over the next 18 months and further de-risk the company's strategy, which is currently focused on research and At the level of API and generics, the global market commoditised. In the developed markets of the Globalisation at a glance
U.S. as well as Europe, pharmaceutical majors are • Revenues from international markets constitute getting cleverer at preventing entrants from getting nearly 66 per cent of total sales, with most exclusivity through aggressive legal defences, authorised generics deals, development of • 15 ANDA approvals for drugs in its portfolio combination products and strategic over-the- counter switching. Added to this is the rapidly • Acquisitions of international pharmaceutical growing competition from low cost generic and API suppliers from India and Eastern Europe.To • Business interest in over 60 countries and exports maintain a long term presence in the global pharmaceutical markets and to grow profitably will require companies to be even more focused on www.drreddys.com

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