Dr Reddy’s Laboratories on Wednesday announced its consolidated financial results for the quarter ended June 30, 2023. The pharma major reported an 18 per cent rise in its consolidated net profit to Rs 1,402.5 crore in the quarter as compared to Rs 1,187.6 crore in the same quarter last year.
Moreover, compared to Rs 959.2 crore in the quarter that ended on March 31, the net profit was up 46 per cent. During the quarter, the company recorded a 149 per cent rise in its revenue to Rs 1,763.3 crore as compared to Rs 1,221.2 crore last year. Sequentially, the revenue rose 42 per cent from Rs 1,238 crore.
According to the company, in the India Business, Q1 FY24 revenue at Rs. 11.5 billion, YoY decrease of 14% and QoQ decline of 11%. Excluding brand divestment income, sales of divested portfolio from base and NLEM-related price reduction impact, India business registered a high single-digit growth. This growth was mainly on account of an increase in base business volumes, it stated.
“…in terms of where the opportunities are, there are three pivots that we are doing as far as India is concerned. One is to bring in innovative products to address the unmet needs, but these unmet needs are pretty much within the spaces that we are already in where we already have the ends met. The second is consumer health. Which is both OTC as well as Nutrition. And the third is digital. And the pivot is largely to look at how we could help the patients in the disease areas that we are present in. The way in which we are going to do is to look at how we could continue to grow in our core but then bring in the innovations so that it becomes sustainable. When it comes to the chronic, I fully agree that it is an important space. We are today, not chronic heavy, 30% of our business comes from Chronic. We will look at both organic and inorganic ways to increase the chronic percentage within the business,” M V Ramana, CEO, Brand Markets (India and Emerging Markets) told Financial Express.com when asked about the pharma major’s plans for the chronic disease segment.
During the quarter, the company’s gross margin was 58.7 per cent. It increased by 880 basis points year-on-year (YoY) and by 150 bps quarter-on-quarter (QoQ).
“The improvement in gross margin was primarily driven by favourable product mix and higher manufacturing leverage partly offset by the benefit from brand divestment income during the previous year and price erosion in certain products. QoQ growth was primarily on account of favourable product mix partly offset by brand divestment income benefit during the preceding quarter,” the company said in a statement.
Moreover, the company spent Rs 498 crore on research and development, which is 15% higher from the year-ago period. R&D expenses as a percentage of sales were 7.4% in the quarter, compared to 8.3% a year ago.
On the trend of approvals of extended indication for existing drugs, Ramana told Financial Express.com that they are also working in this area.
“There are two ways. Absolutely. So the first part is, how do you bring in new combinations, new dosage forms, for the existing big brands to continue to work on the adjacencies, that is supported by clinical evidence. This is also an area that we are working on. But apart from supporting the big brands within the therapeutic areas, we are also working on bringing new innovations, that today are an unmet need in India and bring it at a price that is affordable,” he said.
On plans for the upcoming quarters, Ramana told Financial Express.com that they will continue to look for licensing efforts in the therapeutic areas that they exist in.
“…we have done a few in licencing deals. We have licensed an important product in the area of oncology, which has got multiple indications. We have also licensed an hep product for CAR-T Cell Therapy for CT19. And we will continue to look for licensing efforts in the therapeutic areas that we present in. Whether it is in the areas of oncology, cardiology, diabetology, pain, GI, we will continue to look for opportunities to license in innovative assets that would help in managing the diseases better than what it is being done today,” he added.
Meanwhile, the North America made for 47% of the total sales for Dr Reddy’s in the quarter, while 17% each came from India and Emerging markets. Europe contributed 8% to the total sales.
“During the quarter, we filed four new Abbreviated New Drug Applications (ANDAs) with the US Food and Drug Administration (USFDA). As of 30th June 2023, cumulatively 85 generic filings are pending for approval with the USFDA (82 ANDAs and 3 NDAs under 505(b)(2) route). Out of the pending 85 ANDAs, 43 are Para IVs, and we believe 17 have ‘First to File’ status,” the company stated.
Revenue from Russia for the quarter at Rs. 5.6 billion, YoY growth of 75% and QoQ growth of 9%. YoY growth was driven by uptick in base business, price increase and biosimilars