Dr Reddy's Laboratories—25 years and going strong

India's leading pharmaceutical company, Dr Reddy's Laboratories (DRL) was started in 1984, by Dr Anji Reddy and M P Chary. Initially, it was started as a bulk drug company with a single product in 1985. Today, it manufactures 14 bulk drugs and 32 final formulations. It is a leading producer of quinolones and anti-ulcerants.

Gaining critical mass

The year 2000-01 saw the formal merger of DRL and Cheminor Drugs, a leader in the bulk actives and intermediates field. The acquisition of American Remedies and its merger with the company too was completed in 1999 American Remedies' strong portfolio improved the efficacy of co-prescribed drugs and was a valuable addition to DRL's product basket. These strategic mergers provided critical mass to DRL to address the global market. The company's product basket includes finished dosage forms, active pharmaceutical ingredients (APIs), and biotechnology products which are marketed globally, with a focus on India, US, Europe, and Russia. In 2008-09, DRL will complete 25 years of being in business and is well on its way to charting its transformation from a bulk drugs manufacturing unit to a research-driven entity. DRL today conducts research in the areas of diabetes, obesity, cardiovascular diseases, anti-infectives, and inflammation. In 2005, it was one of the first Indian pharma companies to hive off its research arm into an independent company, Perlecan Pharma. However, the two venture capital (VC) partners have recently decided to sell their stakes back to DRL.

Start to end

DRL's bulk manufacturing facilities located in Andhra Pradesh are operated according to the latest systems of current Good Manufacturing Practices (cGMP) and are inspected and approved by the US Food and Drug Administration (FDA). It has established leadership in synthetic organic chemistry along with developing strong patent navigation skills. The company has its API plants across globe. It has six FDA-inspected plants in India and one cytotoxic facility. The company also has an FDA inspected facility at Mexico and Mirfield, UK. During 2007-08, the company has successfully launched RedituxTM in India, a monoclonal antibody used in the treatment of cancer and thus demonstrated its technological competence in manufacturing a product in the biologics space as well.

Inorganic growth pills

DRL's list of overseas acquisitions includes big ticket buys like the German Betapharm in 2006, and in 2008, a part of the DowPharma's small molecules business located in Mirfield and Cambridge, in UK, with customer contracts, associated products, process technologies, intellectual property rights (IPRs) and trademarks and BASF's pharma manufacturing business and facility in Shreveport, Louisiana, USA, which does contract manufacturing of solid, semi-solid and liquid dosage forms of generic prescription and over-the-counter (OTC) products for companies in the US. According to a company spokesperson, "The acquisition of Dow Chemical Company's Dowpharma small molecules business associated with the two UK sites includes the relevant business, customer contracts, associated products, process technology, IP, and trademarks as well as the transfer of the Mirfield and Cambridge facilities. Employees directly related to the business located at the Cambridge and Mirfield sites will become part of our company. We will have a non-exclusive license to Dow's Pfenex Expression Technology for biocatalysis development."

Filings in the pipeline

During current financial year the company has filled 19 Abbreviated New Drug Applications (ANDAs) in US including 10 Para IV filings. These ANDAs address innovator revenues of about $ 7.9 billion. Its cumulative ANDAs filings come to 122. During current fiscal company has received highest number of approval for ANDAs. It has obtains 13 final approvals from the US and four from Canada, in addition to seven tentative approvals from the US. As of 31 March 2008, the company's US generic pipeline comprises 70 ANDAs pending with the US FDA, including 10 tentative approvals. Its APIs segment also worked out aggressively similarly, the company has filed 54 DMFs in 2007-08. Of these, 23 were filed in US, nine in Canada, 13 in Europe and nine in other countries. DRL has made cumulative filings of 281 DMFs, with 127 in the US. Its three molecules or New Chemical Entities (NCEs), of which two are in clinical development and one is in the pre-clinical stage.

On the radar

The Betapharm purchase continues to drag the company's balance sheet, as it took longer to turn around, thanks to a restructuring in Germany's drug laws. Industry observers point out that in the future, the company may shift its Germany's formulation manufacturing facilities activity to India, which will help generate higher profits from Betapharm in 2008-09. The company's future plans include increasing investments in their global biologics manufacturing infrastructure as well as additional capacities for global generics. It has plans to for strategic acquisitions and new capabilities. Its new R&D capabilities in chemical/bio catalysis will help strengthen the portfolio of services in the custom pharma services (CPS) business.