Financial Daily from THE HINDU group of publications
Thursday, Jul 29, 2004
Financial Daily from THE HINDU group of publications Thursday, Jul 29, 2004 |
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Corporate
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Announcements Marketing - Strategy Dr Reddy's alters business strategy for US — To focus on specialty segments Our Bureau
Dr K. Anji Reddy, Chairman, Dr. Reddy's Laboratories, addressing the company's AGM in Hyderabad on Wednesday. He is flanked by Mr G.V. Prasad (right), CEO and Vice-Chairman, and Mr K. Satish Reddy, COO and Managing Director. - A. Roy Chowdhury
Hyderabad , July 28 FOLLOWING the adverse ruling of the US courts in the patent challenge case of AmVaz sometime ago, Dr Reddy's Laboratories Ltd has decided to change its business strategy for the US market. Addressing the concerns of shareholders on the company's financial performance at the annual general meeting here on Wednesday, the Dr Reddy's Chief Executive Officer, Mr G.V. Prasad, said, "Following the appeals court ruling in AmVaz, we have modified our entry strategy into the US Speciality segment." As a part of the new strategy, instead of targeting the primary care segment such as cardiovascular therapy, Dr Reddy's Labs would now focus on speciality segments with low-entry thresholds such as the dermatology segment, Mr Prasad said. According to Mr Prasad, some of the key concerns regarding the financial performance of the company include decreased profitability, increased R&D investments and sustained earnings growth. On the first concern - decreased profitability, Mr Prasad said the pharmaceutical industry requires longer gestation periods and so a longer-term strategy. "We are here for the long run and as we continue to experience these decreased levels of profitability, let me assure you that we are investing for long-term sustainable value. "We are using the profits from our core businesses of bulk and branded formulations to build several exciting growth drivers. We have built a deep and exciting pipeline for the generics business. This pipeline combined with existing products has the potential to take your company to sales exceeding a billion dollars in the medium term." On the increasing R&D expenditure, Mr Prasad said the current fiscal would be a busy year for the company in drug discovery segment with as many as four new chemical entities (NCEs) in various stages of clinical development by the end of the year. Addressing the concerns over sustained earnings growth, he said, "We are in the process of developing strategies to build partnerships to share R&D and other significant spends to balance the long-term growth prospects and current financial performance. "The outlook for our various businesses is quite positive and we have a portfolio which addresses the short, medium and long-term horizons of the company," Mr Prasad said.
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