Dr Reddys, Aussie Firm Gribbles Plan Venture

Dr Reddy's Laboratories and the Australia-based Gribbles group of companies have signed a memorandum of understanding to form a joint venture company that will establish a network of 50 pathology laboratories and up to 200 specimen collection centres across the country over the next 5 years.

The details of the agreement including equity participation are being worked out.

Dr Reddy's diagnostics division had a turnover of Rs 12 crore in 1999-2000.

"The significance of the venture is that it provides an opportunity for Dr Reddy's to enhance patient care with innovative, affordable, timely and reliable diagnostic solutions by leveraging on the synergies between pharmaceuticals and diagnostics," said Satish Reddy, managing director, Dr Reddy's Laboratories.

 

A company statement said the highly automated laboratories would be computer linked to one another and to the main reference laboratory. They will be supported by collection centres `strategically' located to service a wide number of patients. The resulting low turn around time to generate results will benefit the physician and customer, it said.

The over $100 million Gribbles Group, it added, was one of Australia's largest privately-owned diagnostic laboratory groups.

It operates 23 pathology laboratories and 10 radiology centres in Australia. Many of them are located in public and private hospitals. The group also has a chain of labs and specimen collection centres throughout Malaysia.

The statement also claimed that the facilities would meet internationally accepted accreditation standards to ensure that the highest quality was available at an affordable price. The company would also use its expertise to set up training programmes to develop qualified staff for its laboratories, it said. Dr Reddy's Laboratories is not the first pharma company to foray into diagnostics. Some years ago, the New Delhi-based Ranbaxy Laboratories also entered into a joint venture with Specialty Laboratories of the United States for speciality testing. This company has been struggling to make money and also has been on the rocks for sometime now.

Dr Reddy's Laboratories has announced it will make an American Depository Rights issue to raise upto $200 million. The company plans to invest funds in research and development, acquisitions in Indian and abroad and long-term working capital requirements.