Dr Reddy’s Q2 profit rises 12% with new generic launches in US market

India’s leading generic drug maker Dr Reddy’s Laboratories on October 28 reported a growth of 12 percent in consolidated post-tax profit at Rs 1,113 crore during the September 2022 quarter, owing to an increase of 18 percent in global generics that include 48 percent growth in the United States, despite muted growth in Indian operations.

The drug firm reported a growth of 9 percent in consolidated revenues at Rs 6,306 crore in the September quarter of this year.

In the September quarter of 2021, Dr Reddy’s Laboratories had posted a consolidated post-tax profit of Rs 992 crore on consolidated sales of Rs 5,763 crore.

The drug major saw its sales from the North American market, which makes for nearly 50 percent of its overall sales, growing by 48 percent at Rs 2,800 crore during the quarter under review, driven by the launch of Lenalidomide capsules in the US market as a part of the volume limited settlement with the innovator.

The company also saw its global generics sales grow by 18 percent at Rs 5,594.6 crore (Rs 4,743 crore). Dr Reddy’s reported muted growth of 2 percent in European sales at Rs 419.9 crore (Rs 413.5 crore) and Indian sales growing by 1% at Rs 1,150 crore (Rs 1,140.2 crore)

“We are pleased with the strong financial performance in the current quarter, driven by the launch of Lenalidomide capsules in the US market,” said Dr Reddy’s Co-Chairman and Managing Director GV Prasad.

“Our focus is to build a robust pipeline with products that improve affordability and access to patients globally. We continue to progress well in our productivity, innovation and sustainability agenda,” Prasad added.

During the September 2022 quarter, the company suffered a fall of 23% in pharmaceutical services and active ingredients at Rs 643.4 crore (Rs 837.2 crore), while sales from emerging markets fell by 6% at Rs 1,224.6 crore (Rs 1,298.5 crore) and others declined by 63% at Rs 67.7 crore. (Rs 182.9 crore).

Though the US generic sales grew by 18 percent during the quarter under review, generic sales also grew in the Russian market. This growth of global generics was partly offset by price erosion in generic markets and higher base due to Covid product sales in the previous year, said the company.

The gross profit margin of Dr Reddy’s grew by 565 basis points at 59.1 percent during the September 2022 quarter, which is attributed to the product mix including new products, and accruals related to the production lined incentive scheme. However, they were partly offset by price erosion and provision made on inventory for COVID-19 products.