Pharmaceutical major Dr Reddy's Laboratories (DRL) reported a 25 per cent increase in net profit to Rs 262 crore (Rs 209 crore) in the first quarter of the current fiscal, helped by higher revenues from the sale of generics in the international market, especially in North America.
Total revenues of the Hyderabad-based company increased 18 per cent to Rs 1,978 crore (Rs 1,683 crore).
After adjusting for one-off charges on a voluntary retirement scheme, interest on bonus debentures and normalised tax, the net profit stood at Rs 252 crore, Mr G.V. Prasad, Chief Executive Officer of Dr Reddy's, told newspersons here on Wednesday.
The increase in profit and revenue were primarily driven by a 48 per cent rise in revenue from the sale of generics in North America and Russia.
Revenue growth in Europe and India, however, was ‘disappointing' at 6 per cent and one per cent respectively, Mr K. Satish Reddy, Chief Operating Officer, said.
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He attributed this to de-growth in Germany and less-than expected revenue from top brands in the domestic market. “However, we are taking steps to speed up growth in these markets and it should happen in the next two quarters,'' Mr Reddy said.
As part of its focus on biosimilars, or officially approved versions of innovator biopharmaceutical products made by other drug manufacturers that have gone off-patent, Dr Reddy's plans to partner with a multinational firm.
“Presently, we are in talks with a company for collaboration in areas such as clinical trials in regulated markets,” Mr Prasad said.
On the recent import alert by the US Food and Drug Administration (USFDA) on its Mexico plant, Mr Prasad said the corrective measures sought by the regulator would be completed by October 2011.
Around Rs 30 crore of Dr Reddy's' revenue each year is expected to take a hit due to the import alert.
The company was ‘unable' to find partners for its anti-diabetes drug Balaglitazone, the dream project of its founder, Dr K. Anji Reddy.
“Nobody is ready to partner us in taking balaglitazone forward after the bad experience in glitazones,'' Mr Prasad said indicating that the project could be shelved.
Balaglitazone has completed phase III trials.
According to Mr Reddy, the second half looks ‘very good' for the company as some limited competition products (including olanzapine, fexo pseudo) are slated for launch. “About 9 to 12 products are in the pipeline for this year. We expect growth in North America to be higher than 48 per cent,'' Mr Prasad said.
Dr Reddy's scrip declined 2 per cent to close at Rs 1,567 on the Bombay Stock Exchange Wednesday.