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A vial of the Russian Sputnik V coronavirus vaccine is pictured in Belgrade, Serbia, January 6, 2021. REUTERS/Fedja Grulovic (REUTERS)
A vial of the Russian Sputnik V coronavirus vaccine is pictured in Belgrade, Serbia, January 6, 2021. REUTERS/Fedja Grulovic (REUTERS)

Vaccine progress adds to growth opportunities for Dr Reddy’s

  • The success of the vaccine can improve the company's prospects that has been witnessing strong growth momentum in key markets. While many manufacturers have lined up their vaccines, analysts say there will be sufficient demand to consume at least 100 million doses in India

MUMBAI: With coronavirus vaccines in the spotlight, Dr Reddy’s Laboratories has remained in focus. The progress of the Sputnik-V vaccine is encouraging, with studies in phase-II meeting the endpoint on safety.

Dr. Reddy’s and Russian Direct Investment Fund (RDIF) have partnered to conduct clinical trials of the Sputnik V vaccine and distribute the shots in India.

Also Read | What's got Indians excited about Covid shot

After the review of the safety data from phase II clinical trials of the Sputnik V vaccine by independent Data and Safety Monitoring Board (DSMB), recruitment for phase III has been recommend, and also continuing the trials without modifications.

The success of the vaccine can significantly improve the company's prospects which has been witnessing strong growth momentum in key markets. While many manufacturers have lined up their vaccines, analysts say there would be sufficient demand to consume at least 100 million doses of the vaccines in India, boosting domestic growth outlook.

Dr Reddy’s is also expected to benefit from the recovery in growth in Indian pharma market led by a revival in acute therapies. The acquired Wockhardt portfolio will aid India growth as well.

The US market, which accounts for 40% of the company’s revenues, remains key for Dr Reddy’s. New product launches have strengthened the US base business while the company’s focus on limited competition, niche products brightens outlook.

A strong product pipeline for the US also boosts confidence while easing pricing pressure in the geography is also a positive.

For the just concluded December quarter, analysts at Motilal Oswal Financial Services expect the company’s US sales to have grown 22% year-on-year to $275 million on new launches. India sales are also pegged to grow 21% YoY on better traction in the chronic segment and addition of the Wockhardt portfolio.

Pharmaceutical services and active ingredients (PSAI) segment has also seen strong traction. Not to forget bing an early mover in China, the opportunity is meaningful for Dr. Reddy’s.

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