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Pharma major Dr Reddy’s Laboratories’ consolidated net profit increased to ₹456 crore in the first quarter ended June 30, 2018, compared with ₹59 crore in the same period last year as per the International Financial Reporting Standards.
The revenue has gone up by 12 per cent to ₹3,721 crore, its Chief Financial Officer Saumen Chakraborti told newspersons here on Thursday.
“The contribution from generic Suboxone in the US market, forex gain and operative leverage of manufacturing drove growth,’’ he said, adding that the business was in the “right direction”.
G V Prasad, Chairman and Chief Executive Officer, said focus on operational efficiencies had helped improve margins significantly.
As part of “organisational redesigning’’, the drug-maker identified about 150 to 200 senior employees for retrenchment, the process was on, he added. During the period under review, revenues from North America increased 10 per cent at ₹1,590 crore driven by contribution from new products primarily Suboxone (at about $15 million, according to market reports as company did not disclose) and partly offset by competitive pressures on some key molecules.
The revenue from emerging markets increased 16 per cent at ₹664 crore, while in India, it had increased 30 per cent at ₹607 crore. In Europe, price erosion led to 3 per cent dip in revenue.
R&D spend
The Research & Development (R&D) expenditure in the quarter was little lower at ₹416 crore. “But absolute R&D spend will be at historical levels,’’ Prasad said.
As on June 30, 2018, cumulatively 112 generic filing were pending with the US Food and Drug Administration (USFDA) including 109 ANDAs and three New Drug Applications. Out of 109 ANDAs, 61 are Para IV, out of which 30 have ‘First to File’ status.
Outlook
Going forward, Dr Reddy’s will give priority to a favourable judgement in the ongoing Suboxone litigation, new products, successful resolution of issues with USFDA (on Duvvada Plant) and cost efficiencies.
The company is now waiting to hear from the US regulator after inspection of the plant.
It had to stop selling Suboxone after three days of sales in the US when it was temporarily restrained by a US court. Over margin trend is “positive’’, according to Prasad.
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