Generic launches in US boost Dr Reddy's earnings

Hyderabad-based pharma major Dr Reddy's on Wednesday, February 3, posted what it called its "highest-ever quarterly sales and profits".  For the quarter ended December 31, 2011, its profit is up 88 per cent to Rs 513 crore on revenues of Rs 2769 crore, an increase of 46 per cent compared to the corresponding quarter of the previous year.

This has been helped by the new generic launches it has made in the US market coupled with strong volume growth across its key products in the US. What is particularly important is the contribution from sale of Olanzapine 20 mg, the generic version of Eli Lilly's Zyprexa, a drug used in the treatment of schizophrenia that Dr Reddy's launched in the US in October last. It has contributed about $99 million or around Rs 520 crore between October and December 31 last year. The company and Teva Pharmaceuticals jointly enjoy a 180-day marketing exclusivity for this in the US.   

According to the company, strong volume growth contributed by key products such as lansoprazole, tacrolimus, omeprazole Mg OTC apart from new launches of fondaparinux and antibiotics portfolio have also contributed to the rise in revenues in the US.  

The case of Olanzapine is an important milestone for the company as it is increasingly focusing its generic launches on such limited competition opportunities. In fact, over the next six months, the company hopes to launch some key products in the US market. These need not be limited competition products but could be crucial in providing revenue upsides. In the important market of the US, its revenues were up 133 per cent to touch Rs 1,111 crore in Q3 FY 12 as compared to Rs 476 crore in Q3 FY11. Its other important markets include Russia, India and Europe and here, the generics revenues grew by 13 per cent, 11 per cent and 14 per cent respectively during this period.