Hyderabad: India’s second-largest drug maker by revenue, Dr. Reddy’s Laboratories Ltd, lost its 180-day market exclusivity in the US for its copy of GlaxoSmithKline Plc’s anti-migraine drug Imitrex (sumatriptan) in August. The drug had nearly doubled Dr. Reddy’s US revenue in the June quarter.
The end of the exclusivity doesn’t bother G.V. Prasad, the firm’s vice chairman and chief executive. To compensate, the company has a new line-up of generic drugs either with potential for similar market exclusivity or limited competition. These include ulcer drug omeprazole and anti-blood clot medicine fondaparinux sodium, with a combined market potential of about $1.5billion (Rs7,300 crore). On Monday, Dr. Reddy’s launched nateglinide, its copycat version of Novartis AG’s diabetes drug Starlix, in the US.
Joining hands: Dr Reddy’s chief executive G.V. Prasad says the alliance with GlaxoSmithKline will start generating revenue from the first year.
These products and the firm’s new marketing alliance with GSK, Prasad said, will keep Dr. Reddy’s on its 25% growth path as it aims for revenue of $3 billion by fiscal 2013, Prasad said. Edited excerpts:
There was speculation last week that foreign drug companies are in talks with the promoters of Dr Reddy’s to buy their stake.
No. It is just market speculation. The promoters do not have any intension of diluting their stake in the company.
By when do you see the GSK alliance reaching its potential?
We already have identified the products. In some five-six countries we have already started working with GSK. We will have revenues from the alliance from this year itself. But for it to become a meaningful portion of our revenues, it will take two years.
What revenues are you expecting from the alliance?
We are not sharing the details on expected revenues from the alliance but I can say that it is significant enough for us to announce it in a big way.
How about the margins?
It depends on the country. (But) the margins will be comparable to our branded generics business.
Will you include biosimilars—off-patent versions of biopharmaceutical drugs—in the GSK alliance?
It is likely to be included but it is not confirmed as yet. We are open to joining hands with GSK for biosimilars for markets where we do not have direct presence. We are talking to partners in one or two countries. Right now, we have only two products in biosimilars. For biosimilars to become a meaningful part of our revenues, it will be 2015.
What new businesses are you building to achieve your target of $3 billion revenue by fiscal 2013?
The $3-billion target is not based on new businesses but on the existing businesses—primarily from growth in our global generics business. We have three businesses: pharmaceutical services and active ingredients, global generics, and proprietary products. The pharmaceutical services and active ingredients is about $400 million and is growing at 10-12% and that growth trajectory will go on.