Bangalore: Indian drug maker Dr Reddy’s Laboratories Ltd plans to launch six or seven new generics in the US this fiscal, but sales at its ailing German unit could drop from a year ago, a senior official said.
The new launches will include blockbuster omeprazole, which the company plans to start selling in the US by early next quarter, chief operating officer Satish Reddy said in an interview on Friday.
Omeprazole is a generic version of AstraZeneca’s Prilosec and is indicated for the treatment of stomach ulcers and acid reflux.
Dr Reddy’s will be the second generics maker after Perrigo Co. to sell the copycat variant of this drug.
“It’s a steady plan where every year there will be one winning product,” Reddy said, adding the company planned to launch one major product such as omeprazole, which will have limited competition, every year for the next five years.
Last year, the New York-listed company launched acute migraine drug sumatriptan, a generic of GlaxoSmithKline’s Imitrex, in the US market, which helped its North America revenue nearly double in the June quarter.
Revenue from sumatriptan is expected to decline from this quarter after its exclusive marketing period ended this month, and rival manufacturers Ranbaxy Laboratories Ltd and Sun Pharmaceuticals Ltd have got regulatory nod to launch the drug.
Analysts say launch of omeprazole would be a key growth driver for the fiscal year that ends in March.
Global demand for generic drugs is booming as nations around the world battle rising healthcare costs.
Shares in Dr Reddy’s, which has a market value of around $3 billion (Rs14,610 crore), ended 0.1% higher at Rs802.50 in a Mumbai market that advanced by 1.5%.
Reddy said the company’s business in India, one of its key markets, was expected to grow faster than a sector rate of 12-15% in 2009-10, mainly helped by launches of new products and change in distribution model.
“The (Indian) market is on the upswing,” he said. “It will be the most prolific year as far as new launches are concerned.”
Hyderabad-based Dr Reddy’s, the country’s No. 2 generic drug manufacturer, expects revenue in its German unit Betapharm Arzneimittel GmbH to decline this year as a rise in volume gets offset by pressure on prices due to regulatory issues, Reddy said.
Betapharm, which Dr Reddy’s bought in 2006 for $572 million, has been facing supply constraints and falling prices. It has started supplying drugs to German health insurer Allgemeine Ortskrankenkasse (AOK) under contracts won in December.
“It’s a total market in transition, because what used to be clearly a branded generics market has become a commodity tender-based market,” he said.
In June, Dr Reddy’s entered into a pact with GlaxoSmithKline under which Glaxo will get access to its drugs and supply them in emerging markets such as Africa, West Asia and Latin America.
Reddy said revenue from the Glaxo alliance would start flowing in a significant way in one to two years and that the deal would help it tap new markets without making huge investments to establish its own presence.