Dr Reddy's plans to launch 3 biosimilar products in US, Europe by FY27
This story was originally published at 20:57 IST on 5 November 2024
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--Expect to launch 3 biosimilar products in US, Europe by FY27
--Impairment charges, one-time costs hit Jul-Sept PAT
--Jul-Sept sales, administrative costs high due to one-time costs
--Price erosion in US market in single digits in Jul-Sept
--Focussed on injectables, anti-diabetic products in US
--Jul-Sept India sales growth beat domestic industry growth
--Planned integration of acquired brand Nicotinell in phases
--Sales of JV with Nestle India in-line with expectations
--Got 9 product approvals in China so far in FY25
--Will file 14-15 new products for approval in China every year
--Aim to maintain EBITDA margin above 25% going forward
--Aim to maintain double-digit sales growth
--Cash reserves as on Sept 30 at INR 18.89 bln
--FY25 capex seen around INR 25 bln
--Apr-Sept capex spending INR 12 bln
By Narayana Krishna
HYDERABAD - Terming biosimilars as one of the growth drivers in coming years, Dr. Reddy's Laboratories Ltd. plans to launch three new products in the US and Europe by 2026-27 (Apr-Mar), the company's management said Tuesday in a post-earnings press conference.
A biosimilar is a biological medicine highly similar to another already approved biological medicine. Biosimilars are approved as per the same standards of pharmaceutical quality, safety and efficacy that apply to all biological medicines.
Dr. Reddy's currently has six products awaiting regulatory approvals, including the cancer medicine Rituximab, it said. The company further said that impairment charges and one-time costs related to sales and general administration expenses impacted its September quarter consolidated net profit. For Jul-Sept, the drugmaker's consolidated net profit fell over 15% on year to INR 12.56 billion, missing the consensus average estimate of INR 14.4 billion.
Dr. Reddy's incurred a cost of INR 907 million during the September quarter due to impairment of non-current assets, including the generic equivalent to contraceptive product Nuvaring, according to its financial accounts. The impairment was because of procurement problems related to the underlying product from its contract manufacturer, Dr. Reddy's said.
The drugmaker said though there was a single-digit price erosion in the US for Jul-Sept, it was soft compared to other quarters. The company said it is focused on injectables and anti-diabetic segments in the US to drive growth going forward.
In India, the company said its sales growth for Jul-Sept was better than the domestic industry growth, adding that it is maintaining its 10th place in the Indian Pharmacueitcal Market rankings.
The company said it is in the process of integrating its acquired Nicotinell products portfolio in a phased manner. The sales from its joint venture company with Nestle India were along expected lines, it added.
In China, Dr. Reddy's has received approvals for nine products so far in FY25, and it is aiming to file 14-15 new products every year with the Chinese regulator.
The drugmaker is aiming to maintain its earnings before interest, tax, depreciation and amortisation, or EBITDA, margins above 25%. For Jul-Sept, the company's EBITDA margin fell to 28.4% from 31.7% a year ago. The company reiterated that it will maintain a double-digit sales growth in coming years led by new product approvals and innovative products.
Dr. Reddy's reported a cash reserves of INR 18.89 billion as of Sept. 30. The company said it will leverage its cash balance strength to fund its growth, both inorganically and organically. The company is expecting its capital expenditure for FY25 at around INR 25 billion, of which it has already spent INR 12 billion during Apr-Sept.
On Tuesday, Dr. Reddy's Laboratories' shares ended at INR 1,272.20 on the National Stock Exchange, up 0.31% over Monday. The company declared its earnings post market hours. End
Edited by Tanima Banerjee
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