Dr. Reddy's plans to launch 20 new products in US market in FY 25

8 May 2024 , 01:13 PM

Dr. Reddy’s plans to introduce over 20 products in the US during the fiscal year 2024-25, the company announced in a post-earnings call following a better-than-expected profit for the March quarter.

In the previous fiscal year (FY24), the company launched 21 new molecules in the US market, contributing to a 28.8% year-on-year sales growth to ₹32.6 billion, comprising 46% of total sales.

This growth was attributed to increased market share of key products, volume expansion, forex gains, and the addition of the Mayne Pharma portfolio, acquired for $90 million in February.

North America remains a key market, representing 46% of revenue, with a reported net profit of ₹1,307 Crore, up 36% from the previous year. However, revenue slightly missed estimates at ₹7,083 Crore, growing 12% year-on-year.

EBITDA fell short of expectations due to higher expenses in selling, general, and administrative areas, along with increased R&D spending.

Sequentially, there was a 3% decline in US revenue due to reduced base business volumes, brand price erosion, and ordering patterns. Dr. Reddy’s anticipates significant benefits from the biosimilar segment by FY27, with an annual investment of $50-60 million.

Beyond US generics and branded segments, the company is diversifying into nutraceuticals, vaccines, women’s health, and dietary supplements through joint ventures, partnerships, and acquisitions.

Research and development (R&D) expenditure rose to 9.7% of sales in the March quarter, with plans to maintain it between 8.5-9% of sales in FY25, driven by ongoing clinical trials. At the time of writing, shares of Dr. Reddy’s were trading at ₹6065.60, reflecting a 3.07% decrease from the previous close.

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