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Dr Reddy's: Positive doses

DR Reddy's Laboratories' stock may show firm trends in the short term in the wake of favourable developments regarding its export thrust and R&D efforts. A US court ruling has paved the way for Dr Reddy's entry into the US market.

The legal challenge of Eli Lilly has been blocked by the US Court of Appeals, Federal Circuit in Washington, D.C. This would now enable Dr Reddy's to launch of its 40 mg fluoxetine capsules licensed to its alliance partner. The court ruling would enable Dr Reddy's to tap the US markets without any time lag as compared to would-be competitors. The agreement between Novartis Pharma AG and Novo Nordisk on commercialisation of NN622 (DRF-2725), currently in development for the treatment of type 2 diabetes, in North America may also lead to a firm undertone in the Dr Reddy's stock in the near term. Under this agreement, Novartis acquires exclusive rights to commercialise the compound in the US, Canada and Mexico, with Novo Nordisk retaining certain detailin g rights for the US. Dr Reddy's has licensed DRF-2725 (NN622) to Novo Nordisk in August 1998 against upfront payment, milestone payments and royalties. Though no direct financial benefits are likely for Dr Reddy's, the backing of Novartis could be viewed as a positive. -- BL Research Bureau