While all of Dr. Reddy’s segments—APIs, generic formulations, branded formulations, and custom pharmaceutical services—achieved an increase, its generic formulations business saw the most significant growth. Revenues in this segment were $174.19M in Q3 FY07 as against $18.84M in Q3 FY06.
Dr. Reddy’s December 2006 launch of a generic version of Zofran®, which helps prevent chemo-induced nausea and vomiting, won a 180-day marketing exclusivity. The company captured 55% of the total market and achieved sales of $5M.
Overall sales in North America contributed 60% with an increase to $104.98M in Q3 FY07 from $10.88M. Combined revenues of cholesterol lowering drug simvastatin and benign prostatic hyperplasia drug finasteride were at $76.75M. In Europe revenues grew to $68.82M in Q3 FY07 from $7.86M in Q3 FY06, contributing 40% to the segment.
Revenue from betapharm of Germany, which Dr. Reddy’s acquired in March, 2006, was $60.4M in Q3 FY07 as compared to $57.91M in Q2 FY07. “We believe this acquisition should help RDY establish a strong foothold in Europe, especially Germany, where betapharm was the fourth-largest generic player,” states Napodano. Dr. Reddy’s paid $480M in cash for betapharm, which has a portfolio of about 145 marketed products and had a gross turnover of $164M in 2005. The company expects to double EU sales over the next three years.
It’s API segment grew 29% to $62M, primarily driven by sales of sertraline, according to Dr. Reddy’s. Markets outside India contributed 82%, or $49.88M. This represented a 49% rise in this market segment.
The branded formulations business had an 18% boost to revenues of $72M, driven by growth in India and Russia. Revenues in Russia increased 18% to $21.54M mostly because of enhanced sales from key brands of Nise, Cetrine, and Keterol as well as new candidates on the market. New products launched during the year, totaling 18, contributed $1.6M in revenues in Q3 FY07.
Revenues from the custom pharmaceuticals services business grew to $36M from $2M in Q3 FY06. The acquisition of Roche’s Mexican API business contributed $27.14M in Q3 FY07. At a price of $59M, Dr. Reddy’s gained 18 products (including new steroids) and more importantly got an entry into supplying in-market products to innovators. The rest of the growth in the CPS segment came from an all round increased customer base and product portfolio.
Finally, Dr. Reddy’s emerging business of critical care and biotechnology saw a 20% rise to achieve $4.62M in revenues.