Pharma major Dr Reddy's says pipeline of complex drugs to drive revenue growth in next 4-5 years

Drug major Dr Reddy’s has said that its pipeline of complex drugs could drive revenue growth over the next 4-5 years. The company is planning to launch at least 30 products in the US market in FY24.

Dr Reddy’s has been proactively building a global pipeline of biosimilars, developing new chemical entity (NCE) for immunooncology a kind of cancer treatment that helps body’s immunity to prevent and control the disease. On the other side the company is also building up a neutraceuticals portfolio, vaccines, contract development manufacturing organization (CDMO), and digital healthcare platforms.

“We remain focused on strengthening our core generics and API business and delivering more and more strong foundation. We are building a pipeline of products to meet an evolving need of patients and health care professionals to investment in internal R&D as well as strategic acquisitions,” said Erez Israeli, Chief Executive Officer, Dr. Reddy's Laboratories during the investor call after the results.

The company said that its research and development (R&D) is likely to be somewhere between 8% and 9% going forward, allowing it to invest in the biologics and in clinical trials. As Dr Reddy’s is investing in various businesses, analysts are also upbeat on the pharmaceutical company that recently released it Q4 FY23 results.

ICICI Direct has maintained a “BUY” for the stock due to ramp up across geographies on the back of new launches,  calibrated cost approach based on better product mix, and focus on bolt-on acquisitions and divestments for better optimization. In terms of the US pipeline, ICICI direct analysts said that key launches in complex generics are likely to complement continued volume traction from gRevlimid in FY24 and FY25. Revlimid,  a trademark of Celgene, a wholly-owned subsidiary of Bristol Myers Squibb is used in treating adults with multiple myeloma (cancer).

The company this week reported 11 times surge in consolidated net profit at Rs 959.20 crore for the March quarter compared with Rs 87.50 crore in the same quarter last year. Revenue for the quarter rose 16 per cent to Rs 6,296.80 crore compared with Rs 5,436.80 crore in the corresponding quarter last year. Ebitda for the quarter came in at Rs 1,631 crore, up 26 per cent YoY.

"FY 23 has been a year of record sales, profits and cash flow, driven by our performance in US Generics. We progressed well in our productivity and sustainability agenda. We will continue this to deliver on our purpose, invest in growth drivers and promote a culture that is innovative and collaborative ensuring the future of our business,” G V Prasad, Co-Chairman and MD, said in a statement.