Dr Reddy’s says US FDA drug approvals hard to get after ‘bad’ year
Mumbai: Dr Reddy’s Laboratories Ltd said it expects to launch more than 10 products in the United States this year and hopes business there will improve as it caps off what it termed as a “particularly bad year” marked by regulatory rebukes.
At least four of the country’s second-largest pharmaceutical company’s factories are under US scrutiny for violation of standard manufacturing practices, and chief operating officer Abhijit Mukherjee said on Friday that drug approvals remain challenging.
“The timeline for review of complex products and subsequent approvals from (the US Food and Drug Administration) have been getting deferred,” Mukherjee said, hours after Dr Reddy’s reported a lower-than-expected fourth-quarter profit. “We continue to work with the agency and remain optimistic about the remaining approvals.”
The company reported a 19% drop in fourth-quarter revenue from North America, its largest market, as it struggles to fix problems at three of its India plants that received a warning from the FDA in November 2015 for quality control violations. Last month, Dr Reddy’s was issued a notice of concerns at another plant, in Bachupally, which accounts for over 60% of its US revenue.
“In our view the (FDA’s) observations at Bachupally are procedural and we will deal with the necessary interventions,” Mukherjee said. He said the company has already remediated most of its plants, so it does not expect to spend much on that going forward.
In emerging markets the company said it expects this fiscal year to launch more biosimilar drugs, which are typically high-margin products with less competition.
In India, where the company’s revenue rose 8% in the January-March period, Dr Reddy’s expects revenue to grow between 10 and 12% annually this year, Mukherjee said.
The company reported a fourth-quarter net profit of 3.38 billion rupees earlier in the day, missing analysts’ consensus forecast of Rs4.27 billion.
This was, however, significantly higher than the Rs1.23 billion net income the company had reported a year earlier, when it was hit by a charge related to loss of payments in Venezuela. Reuters