Dr Reddy’s plans to launch more than 20 products in the US in the financial year 2024-25, the Indian generic drug manufacturer said in a post- earnings call after reporting better-than-expected profit for the March quarter.
The company introduced 21 new molecules in the US in FY24, which drove a 28.8 percent on-year growth in sales in that country to Rs 32.6 billion (approximately $393 million), accounting for 46 percent of its total sales, the Hyderabad-based firm said on May 7.
The growth was primarily fuelled by increased market share of key products, volume expansion, forex gains, and the addition of the Mayne Pharma portfolio.
Dr Reddy’s entered into a definitive agreement to acquire the US generic prescription product portfolio of Australia-based Mayne Pharma Group for $90 million (Rs 738 crore) in February.
North America remains a vital market for the Indian company, accounting for 46 percent of its revenue.
Dr Reddy’s reported a net profit of Rs 1,307 crore, up 36 percent from the year-ago period. A Moneycontrol poll pegged the net profit at Rs 1,291 crore.
Revenue came in at Rs 7,083 crore, up 12 percent but fell short of estimated Rs 7,136 crore.
The EBITDA fell short of street expectations due to higher selling, general, and administrative expenses, along with increased R&D spending.
Sequentially, there was a 3 percent decline in the US revenue due to reduced base business volumes, price erosion of select brands and ordering patterns, the management said.
Looking ahead
It, however, anticipates significant benefits from the biosimilar segment in FY27, with a focus on being among the first to launch new products. An annual investment of $50-60 million would be made towards the biosimilars segment.
Apart from its US generics and branded generics segments, Dr Reddy’s is diversifying its portfolio through joint ventures, partnerships, and acquisitions in the nutraceuticals, vaccine, women’s health, and dietary supplement sectors.
Research and development (R&D) expenditure rose to 9.7 percent of sales in the March quarter, the highest for FY24. The company aims for R&D expenses to account for 8.5-9 percent of sales in FY25, driven by ongoing clinical trials.
In India, Dr Reddy’s expects to grow its sales in double digits. In Q4, the India business (adjusted for sale of brands in 4QFY23) grew by 11 percent YoY.
On May 8, the stock was trading at Rs 6,044.95 on the NSE at 12.05 ppm, down 3.4 percent from the previous close.
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