Even as Dr Reddy’s Laboratories focuses on APIs, generics, biosimilars, and OTC products, it is deepening its presence in nutraceuticals, the discovery and development of immuno-oncology new chemical entities and strengthening its CDMO services, says chairman Satish Reddy. “We are also exploring new spaces such as digital healthcare services, clinically differentiated assets, biologics and cell & gene therapy, and disease management,” he tells Sajan C Kumar. Edited excerpts:
What are Dr Reddy’s business priorities today?
Our core businesses of active pharmaceutical ingredients (API), generics, branded generics, biosimilars, and over-the-counter (OTC) products constitute our near-term growth drivers or what we call our ‘horizon 1 of growth’. We aim to continue to deliver growth and profitability of these businesses through improved execution on product development and launch, improved productivity driven by continuous improvement as well as digitisation. Our productivity measures include an integrated product strategy aimed at seamless and first-to-market execution, adoption of digital and analytics, and deployment of Industry 4.0 technologies for smart manufacturing. As the pharmaceutical landscape evolves, we see intense competition in traditional generics, disruption brought on by new players and new business models, and demand for holistic healthcare solutions.
As a company with a history of deep science that has led to several industry-firsts, we continue to plan ahead and invest in businesses of the future. These include deepening our presence in nutraceuticals, the discovery and development of immuno-oncology new chemical entities (NCEs) at our subsidiary Aurigene Oncology (formerly Aurigene Discovery Technologies) and strengthening our contract development and manufacturing organisation (CDMO) services. We are also exploring new spaces such as digital healthcare services, clinically differentiated assets, biologics and cell & gene therapy, and disease management. Together, we see these businesses as our ‘horizon 2 of growth’, i.e., long-term growth bets.
How is your biosimilars business shaping up?
The biosimilars business is part of our key strategic initiatives that are expected to drive both near-term and future growth. Currently, we have a portfolio of six commercial products marketed in India and over 25 emerging markets. In addition, we have several products in the pipeline in oncology and auto-immune diseases in various stages of development for global launches across regulated as well as emerging markets. In late 2022, we announced the completion of phase I study and initiation of phase III study of DRL_TC, our proposed biosimilar of tocilizumab, for global markets. In January 2023, we completed the full set of clinical studies of the proposed rituximab biosimilar candidate, DRL_RI, for filing in highly regulated markets such as the United States, Europe and other regions. We are also ramping up manufacturing capacity to support our global expansion plans.
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What is Dr Reddy’s sustainability agenda?
As an early adopter of environment social governance (ESG) actions as well as voluntary disclosures on sustainability, we released our first sustainability report in the year 2004 and have maintained annual disclosures since then. Subsequently, we led the industry in introducing a ‘sustainability by design’ approach in our operations in 2013. Over the years, our efforts in various aspects of ESG such as waste minimisation, water management, carbon emissions, transparent governance, investment in people development and other areas saw industry-leading initiatives such as zero liquid discharge, zero waste to landfills and self-managed teams.
For the next decade, we have set bold targets in affordability and innovation. We aim to triple our existing reach to touch the lives of over 1.5 billion patients by 2030, ensure at least 25% of our products are first-to-market by 2027 and introduce three innovations to improve standard of care. Our goals in renewable energy, emissions, diversity and inclusion, and corporate governance are equally aggressive.
What have been the main pillars of Dr Reddy’s digitalisation journey?
Digital transformation is our strategic growth enabler and driver. Our digital transformation initiatives are in two areas – in the primary value chain and in the customer-patient journey.
The opportunities and possibilities for transformation that exist across the primary value chain range from selection of portfolio with analytics-based insights, drug development with in-silico experiments, and automated lights out manufacturing with the use of Industry 4.0 technologies to dynamic supply chain management. For example, massive computational capacities can help reduce time lags in drug discovery, while learning engines take data from experiments to create learning loops in the R&D process. The end result is a completely digitalised R&D process. Last year, our largest manufacturing facility in Bachupally joined the Global Lighthouse Network (GLN) of the World Economic Forum — a community of over 100 manufacturers that are showing leadership in applying Industry 4.0 technologies to drive impact in productivity, workforce engagement, sustainability and supply chain resilience.