Growth rates in US markets will decline: Dr Reddy's

Patent expiries, which peaked this year, will decrease over the next few years, says CEO G V Prasad

Hyderabad-based pharmaceutical major Dr Reddy’s Laboratories Limited (DRL) today said that the company’s revenue growth in the US market was going to decline as patent expiries peaked this year.

“US will continue to drive the growth in the current year. However, patent expiries peaked this year and will decrease over the next few years. As a result, growth rates will decline,” DRL vice-chairman and chief executive officer, G V Prasad, told the annual general meeting here on Friday.

However, he assured the shareholders that the company will come up with strategies to protect the bottom line from the impact of this revenue slowdown in the US market.

They management’s outlook on the US market throws up a significant challenge to the company in terms of sustaining the growth in the near to medium-term as US forms the single-largest market, contributing 45% to the total revenues and 36% to the net profit last year.

While Prasad holds the US market to drive the company’s growth in the global generics revenues this year, the first quarter results announced by the company yesterday showed a 27% growth in revenue from North America as compared to a full-year growth of 68% from the US market in 2011-12.

The company yesterday said that it would improve the revenue growth in the US market by undertaking more number of launches, particularly in the second half of the current financial year.

About 42% of the total global generic drug revenues of Rs 1,906 crore for the quarter ended June 2012 had come from the US market, a two% increase over the corresponding previous quarter.