Novartis Shelves Work On Dr Reddys Anti-diabetic Drug

Mumbai, January 23: | Updated: Jan 24 2003, 05:30am hrs
Dr Reddys Laboratories received a setback on Thursday following Novartis decision to discontinue further development of the anti-diabetic compound, DRF 4158, licensed to it. However, Dr Reddys Laboratories informed The Stock Exchange, Mumbai (BSE), that Novartis will continue to collaborate with the company for an additional dual-acting insulin sensitizer compound.

....Raises Stake In Roche To 33%

SWITZERLAND, JAN 23 Novartis AG raised its stake in Roche Holding AG to 32.7 per cent as Daniel Vasella, Novartis chief executive officer, increased pressure on his Swiss rival to accept a merger. Roche said it was informed that Novartis had raised its stake from the 21.3 per cent stake the larger company held, at the end of 2001. Roche said it has the support of the founding families to remain independent. PTI

The terms and conditions of the original agreement with Novartis remain unchanged, the BSE notice said.

Dr Reddys scrip opened at Rs 949.20 on the BSE on Thursday, touched a low of Rs 885.65 and closed at Rs 904.20, registering a fall of 4.74 per cent.

The company also intends to carry out additional pre-clinical studies to determine the appropriate development path for the molecule.

Analysts said the Novartis move would impact Dr Reddys revenues only to the extent of a milestone payment, which was not quantified. The milestone payment, in any case, would not have exceeded $5 million and the market seems to have already factored it with the current downslide of around 4.74 per cent in the share price, they added. Terming it as a temporary setback, Firstcall India Equity Advisors Pvt Ltd country head Dr VVLN Sastry said, Dr Reddys Laboratories should concentrate on developing this molecule on their own and prove to the world that they have the required capabilities without a foreign collaborator. Dr Reddys Labs may also find it cumbersome to out-license its molecules in future as a result of the two setbacks in the last six months, analysts said.

Earlier, Novo Nordisk had suspended the clinical development of its dual- acting insulin sensitiser Ragaglitazar (DRF 2725) after bladder tumours were found in one mouse and a number of rats treated with the drug. Novo Nordisk was to complete a renewed benefit/risk assessment of Ragaglitazar, which is expected to be ready by the first quarter of 2003.