Dr Reddy’s Laboratories Q2 net down 30% at ₹762 crore

Our Bureau Hyderabad | Updated on October 28, 2020

Pharma major Dr Reddy’s Laboratories Ltd’s consolidated net profit declined 30 per cent at ₹762 crore in the second quarter, compared to ₹1,092 crore in the same period last year.

The total revenue of the Hyderabad-based company grew by 2 per cent to ₹4,897 crore (₹4,800 crore). The profit and revenue would have been higher but the sales growth of 20 per cent was adjusted for proprietary products out-licensing income in the previous year.

“There is continued growth across all the markets and improved productivity which is reflected in the healthy EBITDA margin,” Saumen Chakraborti, CFO, Dr Reddy’s, told newspersons on Wednesday.

The company’s revenue from the global generics segment grew 21 per cent, driven primarily on account of new product launches and volume traction, among others.

North America registered a 28 per cent increase in revenue while that of Europe and India grew by 36 per cent and 21 per cent respectively. The emerging markets and rest of the world showed a 4 per cent and 7 per cent rise in revenue respectively.

Covid drugs

The company is looking to complete the trials of Russian Covid vaccine, Sputnik V, “as early as possible”, with a focus on safety of use.

While the phase-II trials are expected to be completed in December, phase-III may go up till March or even beyond, depending on the outcome, according to CEO Erez Israeli.

A vaccine-maker will be also roped in as a partner for production, Israeli said, adding that the feasibility of participating in the distribution of vaccines was also being looked into.

Dr Reddy’s has already launched Avigan (favipiravir) and remdesivir for Covid treament.

“We have further strengthened the development pipeline for Covid drugs, including the vaccine candidate Sputnik V,” Saumen said.

Referring to impact of the pandemic on business, the CEO said there was gradual recovery in the market demand across India, Russia and other markets after a low demand in Ql FY21, although the demand is “yet to fully recover” to pre-Covid levels.

During the quarter, the drug-maker also filed two new Abbereviated New Drug Applications (ANDAs). As on September 2020, 94 generic filings are pending for approval with the US drug regulator. This includes 26 under the ‘First to File’ status. The company expects to launch 30 products this year as against 25 hinted at previously.

Cyber attack

With reference to the cyber security breach the company experienced on October 22, the CFO termed it as a “ransom-ware attack”.

“As of date, our investigation has not ascertained if any data breaches in the incident pertain to personally identifiable information stored in the Company’s systems,” he said.

Recovery and restoration of all applications and data is underway. All critical operations are being enabled in a controlled manner.

When asked if any payment was made to steer clear of cyber attack, the CFO said: “We are doing what is the right thing to do”.

Published on October 28, 2020

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