Dr Reddy's Lab to challenge arbitration award ordered to pay Hatchtech $46.25M; Stock soars

Dr Reddy's said, "The Company is exploring all legal options to challenge the award."

Jun 16, 2021 10:06 IST India Infoline News Service

Dr Reddys Laboratories
Dr Reddy's Laboratories has been ordered to pay about $46.25M Hatchtech Pty Ltd. in an arbitration award. The company is exploring legal options to challenge the award. However, on Wednesday, the company's stock was trading on a positive note shrugging off the arbitration award outcome.

In its regulatory filing, Dr Reddy's Lab said that the receipt of an arbitration award issued by the International Center for Dispute Resolution, U.S., whereby a subsidiary of Dr Reddy’s Laboratories Limited (the Company) has been asked to pay an amount of US$46.25 mn (towards milestones, interest and fees) to Hatchtech Pty Ltd., concerning the asset purchase agreement entered into between the parties in 2015.

Last year, on July 27, Dr Reddy's had announced the receipt of an approval of XEGLYZE (abametapir) lotion, 0.74%, a 505(b)(1) NDA by the U.S. Food and Drug Administration (USFDA).

However, the XEGLYZE approval triggered the contractual pre-commercialization milestone of US$20 mn payable to Hatchtech Pty Ltd. which is included in the above-mentioned award and has already been accounted for and charged off in the Company’s financial statements for the financial year 2020-21.

Dr Reddy's said, "The Company is exploring all legal options to challenge the award."

At around 10.19 AM, Dr Reddy's Lab is trading at Rs5446.20 per piece up by Rs31.30 or 0.58% on Sensex. The stock was near the day's high of Rs5457.35 per piece.

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