Dr Reddy's bets on North America, emerging mkts for growth

Firm's generics business in these territories has become the key growth driver, backed by launch of new formulations

Buoyed by good performance last fiscal, drug major Dr Reddy’s Laboratories is looking for “an even better year” ahead with its generics business in North America and emerging markets becoming the main growth driver, backed by launch of new formulations.

In his letter to shareholders, the drug maker’s chairman Satish Reddy said: “I look forward to an even better year in FY16. A year when we will introduce new formulations, maintain best-in class globally certified scientific, technological and manufacturing facilities, and remain both strategic and nimble in providing complex medicines to meet critical therapeutic needs.”

Dr Reddy’s had posted consolidated net revenue of Rs 14,819 crore, up 12 per cent and profit after tax of Rs 2,218 crore for the fiscal year 2014-15, up 3 per cent.

The company is “well on track with the introduction of new generics in the US market. As of March 31, 2015, we have 68 abbreviated new drug applications (ANDAs) filed for approval from the US Food and Drug Administration (USFDA)”, he said.

Of these, 43 are Para IV filings, and we believe that 13 of them have the ‘First to File’ status, the Chairman said.

Elaborating on growth positive expectations, Dr Reddy’s Laboratories said: “The largest increment of growth is expected to be contributed by the North America generics and Emerging Markets businesses.”

“In global generics, North America performed well with revenues at Rs 64.72 billion (up 17 per cent), thus crossing the USD 1 billion mark (in last fiscal). Twelve new products were launched during the year,” Reddy said.

The company said revenues from emerging markets stood at Rs 3,077 crore, year-on-year growth of 13 per cent. Revenues from India stood at Rs 1,787 crore registering a growth of 14 per cent.

The Hyderabad-based firm’s Emerging Markets vertical comprises various countries including Russia and CIS nations.

Reddy also reiterated the company’s commitment to enhance research and development. “...in FY2015 alone R&D expenses grew by 41 per cent to Rs 1,745 crore, and accounted for 11.8 per cent of sales, versus 9.4 per cent in FY2014,” he said.