?Entrepreneurship fuels innovation?

The first and the last word for the 41-year-old Satish Reddy is to provide affordable healthcare needs with personal commitments. Perhaps, this dictum helped the managing director and chief operating officer of NYSE-listed Dr Reddy?s Laboratories to be recognised as a Young Global Leader 2007 by the World Economic Forum. It?s a double challenge because the company is already coping with the after affects of the post-2005 patent regime. But Satish is confident of meeting the challenge.

Steering the pharmaceutical services and active ingredients (PSAI) and global generics businesses, which are in fact two of the company?s core revenue-generating streams, the chip-of-the-block has played an instrumental role in the company?s transition from a bulk drugs manufacturer to a global player in the branded space by spearheading its entry into emerging markets internationally. In fact, one of Satish?s passions is to build networks and relationship with people in diverse fields and industries.

Having graduated in chemical engineering from Osmania University, in 1988, Satish went on to receive a postgraduation in medicinal chemistry from Purdue University, US, in 1990. He joined the company in 1993 as an executive director responsible for manufacturing and new product development.

So, did he have an inclination to join the business since his younger days? Satish says, ?In the initial days, some events in the company pushed me to manage a crisis, which erupted because the main R&D team quit without any succession plan. There was a total churn in the company. I had to plunge into the crisis without any second thought and I knew I could take it to the shore.?

In 1997, he was appointed managing director. Yes, there was no force from his parents and at one point of time, it was not pharma industry alone, ?My father was also evaluating some projects in the petrochemical sector but that did not materialise from the drawing board stage at all,? he adds.

Several improvements were made and a core group was formed to put the company together. ?That was the time when I worked day and night along with my team, including giving promotions to well-qualified chemists who were at the junior-most level,? he says.

Later, Satish looked at manufacturing. ?Plans were laid out for newer capacities to match the scale of economics. We decided to set the bulk business on competitive scale for the next two years. We wanted to meet compliances and high quality standards to make it a strong bulk drug organisation.

With the competitive nature for APIs increasing, we focused on formulation business for the next five years. The target was to become one among the top 10,? he says. It was a huge challenge to take the company from Rs 40 crore to Rs 200 crore, he adds.

The leadership change brought in results and the scale was achieved. The first acquisition happened in 1999 with an investment of Rs 100 crore of American Remedies, which eventually led to marketing of some complimentary products as well. ?In the next one year, we got the number five position. Though there was guidance from my father, he left the management and freedom to do things to me and then we started looking at bigger scale of acquisitions,? he says. Obviously, the role model is none other than his father, Kallam Anji Reddy, he adds.

The liquidity crunch due to changing dynamics such as the competitive generic market in the US, falling oil prices in Russia, and tender-based model in Germany apart from the growing competition in the domestic market put pressure on Satish. So, how is he coping up? ?Price is no longer a differentiator and it is supply chain efficiency and credibility that gives a decisive and competitive advantage over competitors,? he emphasis.

So, what is making domestic companies look up the value chain? Is the entrepreneurial zeal helping the industry to grow? Says Satish, ?DRL is a company born out of an entrepreneur?s zeal and drive. We need more entrepreneurs to create intellectual property and wealth, which could be redeployed in our economy to fund more start-ups. Entrepreneurship fuels innovation, provides opportunities for wealth creation and inspires others to take this less travelled path.?

Displaying his managerial skills, Satish feels that with many more drugs going off-patent in the US market, the company hopes to have more out-of-court settlements and authorised generics opportunities.

These opportunities ultimately translate into creating more value and help in offering medicines at affordable prices across the world.

?While research and business development activities will continue their momentum, companies will now concentrate more on bettering relationships ?between the patient, doctor and sales force ? and will work on getting a unique position in their mind space. Increasingly, right branding and correct positioning will determine business success in the future,? Satish points out.

The domestic market is maturing and is attracting the company to a larger extent. The revenues in India have increased by 9% to touch Rs 220 crore in Q2FY09 from Rs 210 crore in Q2FY08 and the growth was primarily driven by brands such as Omez-DSR, Atocor, Razo, Razo-D and Stamlo. The company is growing particularly in the dermatology segment. It has also forayed into inhalers with the launch of four products.

?We have started putting things in place so that growth is consistent over the next few years. We have decided to build up and focus on our portfolio. There are huge challenges in branded generics and patented drugs and in penetrating deeper into larger markets such as India, Russia, Germany and the US,?? he says. Besides, after consolidating, the company exited some smaller markets. ?We find the India story interesting as there is a fast changing demography, which gives room to grow,? he adds.

With the overall demand for medicines likely to remain steady if not grow, any slowdown would only increase the attractiveness of the value proposition that Indian pharma offers.

?My vision is to make it to a top few companies in the world. I am focused on the company activities most of the time. A little bit of time is spent on the DRF Foundation, the CSR arm of the group,? he says.

He is active in industry circles, too. He is the founding member of the Hyderabad chapter of the Young Entrepreneurs? Organisation (YEO), a dynamic network of entrepreneurs worldwide. He is also an active member of the Young Presidents Organisation (YPO), a global leadership network of leaders from 100 countries.

On the personal front, Satish is married to Deepti, founder and managing editor of the city magazine Wow! Hyderabad. They have two children, Shravya and Vishal, who are playing a supportive role in the business.

His brother-in-law is none other than the DRL vice-chairman, GV Prasad. The two together are the face of Dr Reddy?s Laboratories today.