Company To Watch: Dr. Reddy’s Laboratories/india
Hyderabad-based Dr. Reddy’s Laboratories, India’s second-biggest pharmaceutical company, is a major global supplier of generic drugs. It has developed a strategic plan to increase its market share in the United States and Europe by releasing a new generic blockbuster drug once a year for at least the next five or six years.
Meanwhile, Dr. Reddy’s has signed a partnership agreement with UK-based GlaxoSmithKline that will allow the British company to distribute Dr. Reddy’s generic drugs in emerging market countries, excluding India. The deal will help Dr. Reddy’s to enter new markets in Africa, the Middle East and Latin America, as well as China, without making major investments to establish its own presence.
Dr. Reddy’s introduced the acute migraine drug sumatriptan, a generic of GlaxoSmithKline’s Imitrex, in the US market last year, which helped it to nearly double its North American revenue. The India-based firm is currently introducing omeprazole, a generic version of AstraZeneca’s Prilosec, indicated for the treatment of stomach ulcers and acid reflux. Dr. Reddy’s will be the second generics maker after US-based Perrigo to sell the generic version of the drug.
Dr. Reddy’s is not eager to rush into cross-border mergers following its experience in Germany, where it purchased Betapharm Arzneimittel in 2006. Soon after the acquisition, Germany introduced new healthcare-payment regulations that resulted in a sharp drop in prices of generic drugs. Dr. Reddy’s wrote off $296 million of that investment in May 2009.