There has never been a year such as this.
We pray that there never will be any more in our lifetime as well as of our childrenand grandchildren.
As on May 14 2021 the virus has infected over 160 million and has claimed the livesof 3.4 million people worldwide. India the second worst infected country in the worldhas witnessed over 25 million cases and more than 270000 deaths.
Your company's core dictum is Good Health Can't Wait'.
Never before in the history of Dr. Reddy's has this maxim been more important than now.In the context of this horrific pandemic let us briefly share with you what your companyhas done to address the situation.
With the pandemic flaring for the first time in April 2020 the primary objective wasto ensure health and safety of our employees and their families while continuing to supplymedicines across the world. Some of the interventions that we quickly put in place were:
A well-being and support plan that comprised tele-consulting helplines 24x7access to clinical psychologists through an online platform and a home isolation program.
Dedicated separate COVID-19 care facilities were launched for employees anddependents in three locations to provide pre-hospitalization care.
For employees working on-site stringent social distancing and safety measureswere deployed in work locations transport facilities and cafeterias. Other measuresincluded multiple stages of disinfection provision of personal protective equipmentautomating actions that require manual contact. Moreover we provided a daily hardshipallowance.
We contracted for additional insurance coverage for COVID-19 which coveredhospitalization and home quarantine expenses. This was extended to our employees and theirdependents in India. Employees were also provided additional COVID-19 leave.
At the same time Dr. Reddy's acted quickly to bring various preventive and curativemedicines to deal with COVID-19 including a vaccine. Let us start with our vaccinejourney.
Sputnik V vaccine
In September 2020 when the first phase of the pandemic was still raging inIndia Dr. Reddy's signed up with the Russian Direct Investment Fund (RDIF) Russia's sovereign wealth fund to cooperate on clinical trials and distribution ofSputnik V vaccine in India. Upon regulatory approval in India RDIF committed to supply100 million doses of the vaccine to Dr. Reddy's.
Thereafter we created a partnership with the Biotechnology Industry ResearchAssistance Council (BIRAC) of the Department of Biotechnology Government of India foradvisory support and to use some of BIRAC's clinical trial centers for clinical trials ofSputnik V vaccine.
From December 2020 we commenced clinical trials of Sputnik V. Based onsatisfactory data from Phase II trials we received approval from the Drugs ControllerGeneral of India (DCGI) to conduct Phase III clinical trial on 1500 subjects as part of arandomized doubleblind parallel-group placebo-controlled study in India.
Simultaneously Sputnik V showed strong efficacy immunogenicity and safetyresults in Phase III clinical trials conducted on 19866 people in Russia by RDIF. Theefficacy of Sputnik V against COVID-19 was reported at 91.6%.
In February 2021 we initiated the process with DCGI for Emergency UseAuthorization of Sputnik V. This authorization was granted in April 2021.
On May 1 2021 the first consignment of imported doses of the Sputnik V vaccinelanded in India. These received regulatory clearance from the Central Drugs LaboratoryKasauli on May 13 2021. The soft launch of the vaccine commenced and the first dose ofthe vaccine was administered in Hyderabad on May 14 2021.
Further consignments of imported doses are expected over the coming period.Subsequently supply of the Sputnik V vaccine will commence from Indian manufacturingpartners. Your company is working closely with six manufacturing partners in India tofulfil regulatory requirements to ensure smooth and timely supply.
Sputnik V makes Dr. Reddy's the third enterprise in India that has beenauthorized to supply COVID-19 vaccines.
We will work closely with stakeholders in the government and the private sectorin India to ensure the widest possible reach of the Sputnik V vaccine as part of thenational inoculation effort. This is a reaffirmation of our determination to fight againstthe COVID-19 pandemic in India.
Sputnik V is not the only commitment of your company regarding COVID-19 treatments. Inaddition we have been involved in three other medicines.
a) Remdesivir: We signed a licensing agreement with Gilead Sciences Inc. that grantsus the right to register manufacture and sell Remdesivir a potential treatment forCOVID-19 in 127 countries including India. We launched Remdesivir under the brand name"Redyx" in India in September 2020. With the surge of COVID-19 cases inthe second wave we ramped-up our capacities to increase availability of the medicine.
b) Avigan (Favipiravir): We entered into a licensing agreement with Fujifilm ToyamaChemical Co. Ltd. to develop sell and distribute Avigan (Favipiravir) in all countriesother than Japan China and Russia. This has enabled us to launch Avigan 200 mg tabletsin India and few other markets. We are also conducting
Phase III trials in North America for outpatient setting with mild to moderatesymptoms.
c) 2-deoxy-D-glucose (2DG): The 2-DG has been developed by Defence Research andDevelopment Organization (DRDO) laboratories in collaboration with Dr. Reddy's. The drugreceived emergency use approval as adjunct therapy for hospitalized moderate to severeCOVID-19 patients.
We are also working on Molnupiravir Baricitinib and other COVID-19 drugs for treatmentranging from mild to severe conditions.
To retain basic continuity across our annual letters let us share the consolidatedfinancial results of your company for FY2021.
Consolidated revenues were Rs 189.7 billion or a 9% growth over the previousyear.
Consolidated gross profit was Rs 103.1 billion which was 10% greater vis-a-visFY2020.
Earnings before interest taxes depreciation and amortization (EBITDA)increased to Rs 47.4 billion or an increase of 2% versus the previous year.
Operating profit increased by 52% to Rs 24.3 billion.
Profit before taxes (PBT) was Rs 26.4 billion which was 46% higher than Rs 18billion earned in the previous year.
Profit after taxes (PAT) was Rs 17.2 billion or 12% less than in FY2020.
Diluted earnings per share (EPS) was Rs 103.65 in FY2021 versus Rs 117.40 inFY2020.
We wish to take this opportunity of thanking every employee of your company for puttingin all the extra efforts in these trying times to make these results happen. They havedone spectacular work.
Two of our key promises have been addressing unmet patient needs and helping patientsto manage disease better. Nothing has underscored the importance of these promises as theCOVID-19 pandemic.
We do not know when the second wave will subside. Neither do we know whether there willbe a third wave and of what intensity. But we do know that the only preventive worth thename is vaccination. And we are committed to seeing that your company plays a key role inthe vaccinating program for our citizens.
Because Good Health Can't Wait.
Many of us have lost loved ones during this pandemic especially in the second wave.Our sincerest condolences to them and our prayers that the families have the spirit andstrength to overcome their tragedies.
Stay safe. Vaccinate as soon as you can. Wear masks. Maintain social distancing. Thistoo shall pass. But it needs our combined efforts. And determination to succeed.
With our best regards and prayers
|G V Prasad |
|Co-Chairman and Managing Director |