Bangalore: Dr Reddy’s Laboratories Ltd , India’s second-largest drugmaker by sales, on Friday said consolidated quarterly profit doubled on strong generic drug sales in the United States, topping forecasts and sending its shares up 5%.
Indian generic drugmakers including Dr Reddy’s and rival Ranbaxy are poised to gain as drugs worth about $100 billion lose patent protection over the next two years but they have to contend with intense competition, rising lawsuits from rivals and a stricter US health regulator.
The launch of the generic version of Sanofi-Aventis’ allergy drug Allegra D-24 helped the company’s revenue from North America jump 68% to 5.9 billion rupees, Dr Reddy’s, which is also listed in New York , said in a statement.
However, sales in Europe, another key market, fell 5% as its German unit Betapharm struggled with pricing pressure amid intense competition, the drugmaker said.
Germany, one of the largest generics market in the world, has transitioned from branded generics to commodity generics — or even cheaper copycat drugs — increasing pricing pressure on branded generic players.
Dr Reddy’s German unit Betapharm, on which it took a hefty write-off last fiscal year, has been a drag on its earnings due to regulatory issues. Dr Reddy’s has been trying to turn around the unit, which it purchased for $572 million in 2006.
Hyderabad-based Dr Reddy’s reported a net profit of Rs 335 crore ($75 million) for the fourth quarter ended March, up from Rs 170 crore reported a year earlier, under international accounting rules.
A Reuters poll of analysts had forecast net profit of Rs 263 crore on revenue of Rs 1,911 crore.
Revenue for the New York-listed company rose 23% to Rs 2,017 crore during the quarter.
Larger rival Ranbaxy Laboratories Ltd said earlier this week quarterly profit fell 68.4%, as the year-ago quarter had higher limited competition drug sales, but the drop was lower than analysts’ forecasts.
Dr Reddy’s shares have risen 0.08% this year, better than a near 9% fall in the sector index and a near 10% decline in the wider index .