DRL To Take Discovery Route To Turn Global

Hyderabad, July 29: | Updated: Jul 30 2002, 05:30am hrs
Pharma major Dr Reddys Laboratories Ltd (DRL) has set its focus high on research and development and generics to become a discovery-led global pharmaceutical company in the next five years. Two new emerging businesses including critical care division and biotechnology division would not only help Dr Reddys to fulfil its ambition but would help in exploiting the emerging opportunities across the globe.

...Terms Suspension Of Drug Trial A Temporary Setback
Our Corporate Bureau
Hyderabad, July 29: The suspension of clinical development of Ragaglitazar (DRF 2725) is a temporary setback and that risk of failures was inherent in the drug discovery process, DRL chairman Dr K Anji Reddy informed the stakeholders.
Dr Reddys statement to the stakeholders was in response to the recent decision of Novo Nordisk to suspend the clinical trials of DRF 2725. The Ragaglitazar developments hint at the risks inherent to the drug discovery process. Failures are an integral part of bringing to the market novel and innovative products that address significant unmet medical needs, Dr Reddy said. While the result of further work on the tumour mechanism is awaited, I remain optimistic of the outcome. Despite the challenges we face, the company will continue to manage risks intelligently, balancing financial risk with return and control over the development process, he further said.
Generics is an important part of Dr Reddys business per se. It assumes even greater significance as a source of finance for funding discovery research. Dr Reddys views generics as the instrument to generate cash for ploughing back into discovery, said DRL chairman Dr K Anji Reddy in the latest annual report. With a large number of block-buster drugs going off-patent by 2005, global generics market set to explode. The generic challenge is, therefore, would ensure Dr Reddys gets the benefits of such marketing exclusivity for different formulations on a more or less regular basis, Dr Anji Reddy pointed out.

We at Dr Reddys believe that in the next five to six years, DRL should be able to fulfill its vision of being a discovery-led global pharmaceutical company, Dr Reddy added.

To fulfill the ambition, Dr Reddys will have at least five state-of-the-art laboratories in India and the US in the next one year. The current R&D pipeline including focus on terapies such as diabetes, inflammation, lipid metabolism, oncology and cardio-vascular diseases. A lead molecule in restenosis is, currently, in the late pre-clinical stage, according to the annual report. The total expenditure on Research and Development (R&D) has substantially gone up during the last fiscal.

...Records Rise In Market Value, Brand Value, EVA
Our Corporate Bureau

Hyderabad, July 29: The Economic Value (EVA), Brand Value and Market Value (MVA) have witnessed a sharp increase in 2002 as against 2001. The EVA has nearly grown three-fold to Rs 294.5 crore as against Rs 94.50 crore during the previous fiscal. It was Rs 5.6 crore in the fiscal 2000.

The shareholders funds touched a high of Rs 1,458 crore in 2002 as against Rs 553 crore in the year 2001 and it was Rs 476.8 crore in 2000.

The return on capital employed has gone up sharply at 32.7 per cent as against 23.2 per cent in the previous year. And it was 14.2 per cent.

The operating profit before interest and tax (PBIT) was higher at Rs 481.70 crore in 2002 as against Rs 215.8 crore in 2001 and it was 123.6 crore in 2000.

After taken into consideration of all factors, the Dr Reddys brand value in 2002 has been put at Rs 3,362.60 crore. For the sixth consecutive year, Dr Reddys has attempted to put a rupee figure to its efforts to build a strong brand. The Iuterbrands earnings Multiple Approach has been used to evaluate the Dr Reddys brand. An inflation factor of six per cent has been assumed and the brand strength is a composite of seven internal attributes including present value of brand profits, weightage factor, weighted profits, remuneration of capital @ WACC, brand related profits, Tax @ 8.3 per cent and brand earnings.

The market value added (MVA) has also increased sharply to Rs 4,594.80 crore in 2002 as against Rs 3,645.90 crore in 2001. It was Rs 3,362.30 crore in 2002.