Axis Direct's research report on Dr. Reddy's Laboratories
US District Court has ruled that Dr Reddy’s (DRRD) NDA (505 (b)(2))for Aloxi (Palonosetron) infringes 3 outstanding patents and also turned down its claim’s to invalidate 2 patents. While DRRD would appeal in higher court, we believe it would not have material impact as by the time decision comes – Aloxi would have been genericized given the settlement (Sep 2018).
Outlook
We cut FY18/19F EPS estimates by 8%/3% and revise TP to Rs 2,600 (20x Dec’18) vs. Rs 2,700 earlier. While outcome of re-inspection (Feb-Mar’17) by USFDA remains critical, we remain below consensus and maintain SELL rating given delays in its key product launches.
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