Dr Reddy’s Labs surged on the bourses after it got the rights to develop and commercialise NeuVax, a vaccine used to treat breast and gastric cancers, in a deal with Galena Biopharma.
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Speaking on the investment into research and development (R&D) strategy in 2014, its vice-chairman and managing director Satish Reddy said, “Innovation continues to be the core for what the company does, it always was and it will continue to be. It is just the nature of how innovation is being prioritised, that has changed quite a bit.”
When asked about the current R&D spend of the company and how much it expects to go up in the coming years, Reddy said: “We already indicated about a year back that it will go up in the coming years. Just to give an idea of the numbers, I think first quarter we talked about around 9 percent and I think that is what it is going to be, between 9 and 10 percent for the next few years.”
During Dr Reddy’s time
According to Satish Reddy, during Dr Reddy’s time the focus was largely on drug discovery, in R&D spend or in terms of what the company was betting on, there was a focus on drug discovery.
"As you would have remember, there was a problem with the class of compounds that we were working around and ultimately when the entire class came under a cloud we had to abandon the programme," he said.
"So discovery got reprioritised after that. We shut down the lab in Atlanta and then we brought this whole discovery programme under a company called Origin -- which was 100 percent owned by Dr Reddy’s and then it became part of the business model," he added.
"The second was the company’s focus on spends in terms of research; especially in medium to longer term, which has also been moved towards what we called the proprietary products," Reddy said.
Current scenario
"There are biosimilars at one end, although they can be called generics, but they do not call for innovation at a completely different level. There are proprietary products, which are more of speciality generics. Besides, there is also a big amount which is being spent and also it is going up in complex generics. It is where the company has again moved up quite a bit and that is one of the areas, which is taking up a significant focus of R&D at this point of time," Reddy said.
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