Dr. Reddy’s Laboratories on Friday reported its consolidated financial results for the quarter that ended on September 30, 2023. The company recorded profit at Rs 1482.20 crore, up 30 per cent in comparison to Rs 1114.20 crore during the corresponding quarter of FY23.

The company reported revenue from operations at Rs 6902.60 crore, up 9 per cent as against Rs 6331.80 crore during the quarter ended September 2022.

In the Global Generics (GG), Q2 FY24 revenue at Rs. 61.1 billion, YoY growth of 9 percent and QoQ growth of 2 percent. This growth was primarily driven by North America and Europe.

Dr. Reddy’s Pharma reported Q2 FY24 revenue at Rs. 31.7 billion, YoY growth of 13% and QoQ decline of 1 percent in the North America business. The growth was on account of growing momentum in the core portfolio, Mayne integration, favorable move from foreign exchange which was partly offset by price erosion, it stated.

Meanwhile, the company reported Q2 FY24 revenue at Rs. 5.3 billion, YoY growth of 26 percent and QoQ growth of 4 percent. The growth was driven by leveraging existing portfolio, contribution from new products and favorable forex which was partly offset by price erosion.

“We delivered another quarter of strong results with highest ever sales and profits, driven by market share gains and momentum in our US generics business and robust growth in Europe. We are continuing to strengthen our pipeline both organically and through business development to drive growth and create differentiation,” said GV Prasad, Co-Chairman & MD, Dr Reddy’s Laboratories.

In the India Market, Q2 FY24 revenue at Rs. 11.9 billion, YoY growth of 3 percent and QoQ increase of 3 percent. “This growth was largely driven by pricing, new launches and partly offset by NLEM impact and muted demand due to weak acute season. Excluding NLEM, operational sales grew in mid-single digit,” it added.

During the press conference, Parag Agarwal, Chief Financial Officer, DR Reddy’s Laboratories Ltd. informed that the launch of Nerivio which is their first digital therapeutic product in India and the in-licensed NCE Pyrotinib from Hengrui are some of the strong momentums of the quarter.

On the market performance of this product, M. V. Ramana, CEO, Branded Markets (India & Emerging Markets), Dr. Reddy’s Laboratories told Financial Express.com: “So, on Nerivio, we consider it as a test launch, as it is our first digital therapeutic product for migraine that we have launched in the market. We have seen that a good number of neurologists have picked up this product and we are also getting positive feedback from patients who have used this product. Obviously, this being a very recent launch, we would have to wait a couple of months to see how the adoption goes and how a good number of patients see that there is a good benefit coming out of Nerivio.”

“On Pyrotinib, we have signed a partnership with Hengrui. We will conduct trials in India. Both in first-line and second-line for HER2 breast cancer, we see this as a very meaningful drug in terms of the PFS compared to the existing standard of care”, Ramana informed.

He also revealed that they will continue to focus on bringing new generic formulations but also innovative therapies in the Oncology segment for Indian patients.

“We definitely feel it will it has got a value in India. And as you would know, we are one of the leading players in oncology, not just in India, but globally as well. And hence, in oncology, we will continue to look for not only the best of class generics, we also want to have opportunity to bring in the best of class innovative products so that we’re able to give a comprehensive treatment to the Indian patients,” he told Financial Express.com.

In terms of our expectations for the Indian market, India market continues to be the focus market, he emphasised.

“It has got, let’s say two legs. One would be how do we drive our base business? And how do we grow our big brands. The second is also where we have three pivots, as far as innovation is concerned, one around innovation, innovative products. The second is consumer health and third is digital. We have several of them. Now in various stages of one, what one would call an MVP as we start to see the feedback on those MVP, if they’re meeting the expectations and if there is a product market fit, we would obviously scale them and what doesn’t have a product market fit we would not take them forward,” he informed.

According to the company’s statement, Q2 FY24 revenue from Emerging Markets at Rs. 12.2 billion, YoY decline of 1 percent and QoQ growth of 5 percent.

The Hyderabad-based company also reported Q2 FY24 revenue at Rs. 7.0 billion, with a growth of 9 percent YoY and 5 percent QoQ. YoY growth was mainly driven by new product launches, favorable move from foreign exchange partly offset with price erosion and QoQ growth was mainly driven by new product launches, it maintained.

Research & development (R&D) expenses in Q2FY24 was at Rs 540 crore, 7.9 per cent of the total revenue. “R&D investments are driven by ongoing clinical trials on differentiated assets, as well as other developmental efforts to build a healthy pipeline of new products across our markets for both small molecules and biosimilars,” the company stated.

The capital expenditure during the quarter was at Rs 320 crore and free cash-flow during the period was at Rs 1450 crore (before acquisition payout). Meanwhile, net cash surplus for the company stood at Rs 5910 crore as on September 30, 2023.

On aquisition plans for sustainable market growth, Erez Israeli, Chief Executive Officer at Dr. Reddy’s Laboratories told Financial Express.com: “…we are looking for we are looking for opportunities in all the spaces that we are there that we are there today. So, we are looking for both acquisition as as well as companies that will have complementary portfolios and have a complementary capability to ours, the preference is India and emerging markets but we are absolutely looking for a opportunities also in all the other spaces including the United States, API etc.”

He also informed Financial Express.com that they are planning to launch generic formulations and biosimilars for the drugs that are going to off-patent in the upcoming months not just for the India market but also for the global pipeline.

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