Dr Reddy’s Q3 FY24 net up 11% at ₹1,378 crore

Dr Reddy’s Laboratories’ consolidated net profit increased 11 percent at ₹1,378 crore in the third quarter ending December 31, 2023 against ₹1,247 crore in the corresponding quarter of the previous fiscal. 

The total revenue of the Hyderabad based company increased 7 percent to ₹7,248 crore in the quarter under review compared to ₹6,770 crore in the year ago period. 

“It has been yet another strong quarter with steady financial and operational results. We also recorded highest-ever sales,’‘ Parag Agarwal, Chief Financial Officer, Dr Reddy’s told newspersons on Tuesday. The growth was driven by new launches, Europe base business and market share gains in the US, Agarwal said.

REVENUE GROWTH

The global generics business grew by 7 percent year-on-year at ₹6,300 crore, primarily driven by increase in volumes of our base business, new product launches, partially offset by price erosion in certain markets.

North American revenue increased 9 percent at ₹3,350 crore on account of market share expansion in certain existing key products and revenues from new product launches, partly offset by price erosion.

The revenue growth in Europe and Domestic Market was at 15 percent and 5 percent, respectively while in emerging markets, there was a decline of 2 per cent. Revenue from the rest of the world went up by 16 per cent. 

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The company, which is ranked 10th in Indian market now, is hoping to post double digit growth in few quarters from now. ``We see a number of significant launches in the fourth quarter,’‘ Agarwal said growth will be built on innovative portfolios.’‘

On the Red Sea and Panama crisis, CEO Erez Israeli said, “There was no material impact’ except little cost escalation in deploying alternative routes.”

RESEARCH AND DEVELOPMENT

Research & development (R&D) expenses in the quarter under review were at ₹560 crore, accounting for 7.7 percent of the revenue (7.1 per cent in Q3 FY23).

R&D investments are driven by ongoing clinical trials on differentiated assets, as well as other developmental efforts to build a healthy pipeline of new products across our markets for both small molecules and biosimilars, the CFO said. Dr Reddy’s received an approval from UK MHRA for its proposed  bevacizumab biosimilar.

In North America, it launched four new products of which two were in the US. During the quarter, the drug-maker filed two new Abbreviated New Drug Applications (ANDAs) with the USFDA.

As on December 31, 2023, 79 generic filings are pending for approval with the USFDA (75 ANDAs and 4 NDAs under S0S(b)(2) route). Out of these, 41 are Para IVs, and 21 have ‘First to File’ status, per the company.  

USFDA INSPECTIONS

The US FDA completed its inspections at the company’s Bachupally facility. The responses to the observations were submitted within stipulated timelines.

In the product specific Pre-Approval Inspection (PAI) at biologics manufacturing facility in October 2023, the company was issued a Form 483 with 9 observations.

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The US drug regulator conducted routine cGMP inspection at formulations manufacturing facility (FTO-3) in October 2023, after which a Form 483 with 10 observations was issued. In the GMP and Pre-Approval Inspection (PAI) at the R&D unit in December 2023 a Form 483 with 3 observations was issued.

The company’s stock price closed ₹8.70 or 0.15 per cent lower at ₹5,835 on NSE.

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