Dr Reddy's Lab gains after calling off JV for generic drugs in Japan

The announcement was made during trading hours today, 3 June 2013.

Meanwhile, the S&P BSE Sensex was down 77.26 points or 0.39% at 19,683.04.

On BSE, 11,000 shares were traded in the counter as against average daily volume of 24,226 shares in the past one quarter.

The stock hit a high of Rs 2,129 and a low of Rs 2,082 so far during the day. The stock had hit record high of Rs 2,150.90 on 13 May 2013. The stock had hit a 52-week low of Rs 1,528 on 19 June 2012.

The stock had outperformed the market over the past one month till 31 May 2013, surging 3.4% compared with the Sensex's 1.31% rise. The scrip had also outperformed the market in past one quarter, jumping 18.86% as against Sensex's 4.77% gain.

The large-cap company has equity capital of Rs 84.91 crore. Face value per share is Rs 5.

Dr Reddy's Laboratories (Dr Reddy's) and FUJIFILM Corporation (Fujifilm) in a joint statement during trading hours today, 3 June 2013, said that they have decided to terminate the memorandum of understanding (MoU) to enter into an exclusive partnership in the generic drugs business for the Japanese market and to establish a joint venture (JV) in Japan.

Based on the MoU signed on 28 July 2011, the two companies had conducted detailed studies on the establishment of a JV for developing and manufacturing generic drugs in Japan. However, as Fujifilm realigns its long-term growth strategy for the pharmaceutical business, both companies have decided to terminate the MoU.

Dr Reddy's and Fujifilm will continue to explore partnership/alliance opportunities in other pharmaceutical businesses such as active pharmaceutical ingredients (API) development and manufacturing, contract research and development and manufacturing, and the development and marketing of super-generics, the statement said.

Commenting on the development, GV Prasad, Chairman and CEO, Dr Reddy's said, "Unfortunately, we will not be able to partner with Fujufilm specifically for generic formulation business in Japan. However, I want to reinforce our commitment towards a planned entry into Japan to bring affordable and innovative drugs to more patients worldwide".

Takatoshi Ishikawa, Director Corporate Vice President and General Manager of Pharmaceutical Products Division of Fujifilm said, "In the long-term we will be focusing more on priority fields such as new drugs in cancer field, more value-added super Generic, and bio-related business by using our core technologies: analysis technologies, original nanotechnology, and high reliability and high quality manufacturing technologies. Meanwhile, we will continue future collaboration with Dr Reddy's in other fields".

Fujifilm is one of the major operating companies of FUJIFILM Holdings. Since its founding in 1934, the company has built up a wealth of advanced technologies in the field of photo imaging, and in line with its efforts to become a comprehensive healthcare company, Fujifilm is now applying these technologies to the prevention, diagnosis and treatment of diseases in the medical and life science fields.

Dr Reddy's Laboratories' consolidated net profit surged 66.6% to Rs 570.89 crore on 25.6% growth in net sales to Rs 3339.94 crore in Q4 March 2013 over Q4 March 2012.

Dr Reddy's Laboratories is an integrated global pharmaceutical company. Through its three businesses - Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products - Dr Reddy's offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars and differentiated formulations and NCEs. Therapeutic focus is on gastro-intestinal, cardiovascular, diabetology, oncology, pain management, anti-infective and pediatrics. Major markets include India, USA, Russia and CIS, Germany, UK, Venezuela, South Africa and Romania.

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