MIRA
INFORM REPORT
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Report Date : |
13.10.2007 |
IDENTIFICATION DETAILS
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Name : |
DR. REDDYS LABORATORIES LIMITED |
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Registered Office : |
7-1-27, Ameerpet,
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
24.02.1984 |
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Com. Reg. No.: |
01-4507 |
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CIN No.: [Company
Identification No.] |
L85195AP1984PLC004507 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
HYDD00080D |
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Legal Form : |
Public limited
liability company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturers and
Sellers of Bulk Drugs, Formulations and Diagnostic Reagents and Kits. |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 170000000 |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is an old,
well-established and reputed company engaged in manufacturing and marketing
of pharmaceuticals. The company
manufactures wide range of pharmaceutical products in It can be
considered good for business dealings at usual trade terms and conditions. |
LOCATIONS
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Registered
Office : |
7-1-27, Ameerpet,
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Tel. No.: |
91-40-23731946/23731397/26511723 |
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Fax No.: |
91-40-23731955/23734504 |
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E-Mail : |
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Website : |
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Corporate Office
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7-1-27, Ameerpet, |
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Tel. No.: |
91-40-23731946 |
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Fax No.: |
91-40-23731955 |
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Website |
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Plants (In |
Bulk
Drugs – I, II, III and IV Plot Nos. 137,
138 & 146, IDA Bollarum, Jinnaram Mandal, Medak District - 502 320, Andhra Pradesh Plot Nos. 110
& 111, IDA Bollarum, Jinnaram Mandal, Medak District - 502 320, Andhra Pradesh Plot Nos. 116,
IDA Bollarum, Jinnaram Mandal, Medak District
- 502 320, Andhra Pradesh Plot No. 9/A,
Phase III, IDA Jeedimetla Ranga Reddy District – 500 055, Andhra Pradesh Bulk Drugs – V Peddadevulapally,
Tripuraram Mandal, Nalgonda District – 508207, Bulk Drugs – VI IDA
Pydibheemavaram, Ransthal Mandal, Srikakulam District – 532409, Andhra
Pradesh Bulk
Drugs – IX IDA Pydibheemavaram, Ransthal Mandal,
Srikakularrf Dist, AP 532 409 Formulations I – IDA Bollaram Jinnaram Mandal, Medak District – 502320, II- Survey No. 42, Bachupally Quthbullapur Mandal, Ranga Reddy District –
500123, Andhra Pradesh, India III – R S No. 63/3 and 63/4, Thiruvandarkoil Mannvipet, Pondicherry –
605102, Tamil Nadu, India IV – Ward – F, Block –4, Adavipolam, Yanam, V – Plot No. A-3 to A-6, Phase 1-A, Verna
Industiral Estate, Verna, VI – Khol, Nalagarh, Solan, Pradesh Generics Survey No. 41, Bachupally
Quthbullapur Mandal, Ranga Reddy District – 500043, Boitech/Critical Care/Diagnostics Survey
No.47, Bachupally Quthbullapur Mandal, Ranga Reddy District – 500043, Custom Chemical Services/Discovery Research |
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Plants
(Outside |
Huangpujiangzhonglu
Kunshan Economic and 208-214, |
DIRECTORS
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Name : |
Dr. K. Anji Reddy |
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Designation : |
Executive Chairman |
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Name : |
Mr. G.V. Prasad |
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Designation : |
Director |
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Name : |
Mr. Satish Reddy |
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Designation : |
Director |
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Name : |
Dr. P. Satyanarayana Rao |
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Designation : |
Director |
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Name : |
Dr. V. Mohan |
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Designation : |
Director |
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Name : |
Dr. Omkar Goswami |
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Designation : |
Director |
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Name : |
Mr. Ravi Bhoothalingam |
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Designation : |
Director |
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Name : |
Mr. P.N. Devarajan |
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Designation : |
Director |
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Name : |
Dr. A. Venkateswarlu |
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Designation : |
Director |
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Name : |
Mr. |
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Designation : |
Director |
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Name : |
Mr. Anupam Puri |
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Designation : |
Non – Executive Director |
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Name : |
Mr. J P Moreau |
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Designation : |
Director |
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Name : |
Mrs. Kalpana Morparia |
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Designation : |
Director |
KEY EXECUTIVES
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Name |
Mr. K. Satish Reddy |
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Designation |
Managing Director & Chief Operating Officer |
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Age |
33 years |
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Qualification |
B. Tech., M. S. |
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Experience |
9 years |
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Date of
Joining |
18th January, 1993 |
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Previous Employment |
Director – Globe Organics Limited |
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Other
Directorships |
1.
Diana Hotels Limited 2.
DRL Investments Limited 3.
Compact Electric Limited 4.
Cheminor Investments Limited |
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Name |
Dr. K. Anji Reddy |
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Designation |
Executive Chairman |
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Age |
61 years |
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Qualification |
B. Sc. (Tech.), Ph. D. |
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Experience |
31 years |
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Date of
Joining |
1st September, 1986 |
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Previous
Employment |
Managing Director – Standard Organics Limited |
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Other
Directorships |
1.
Diana Hotels Limited 2.
ICICI Venture Funds 3.
Deccan Hospitals Corporation Limited 4.
Biotech Consortium India Limited 5.
Viral Therapeutic, Inc. |
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Name |
Mr. G V. Prasad |
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Designation |
Executive Vice Chairman and CEO |
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Name |
Mr. V. S. Vasudevan |
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Designation |
Chief Financial Officer |
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Name |
Dr. R. Rajagopalan |
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Designation |
President |
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Name |
Mr. Arun Sawhney |
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Designation |
President |
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Name |
Mr. Abhijit Mukherjee |
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Designation |
President |
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Name |
Mr. K. B. Sankara Rao |
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Designation |
Executive Vice President |
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Name |
Mr. Saumen Chakraborthy |
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Designation |
Executive Vice President |
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Name |
Mr. S. Venkatraman |
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Designation |
Senior Vice President |
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Name |
Mr. Vilas M. Dholye |
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Designation |
Senior Vice President |
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Name |
Mr. Ashwani Kumar Malhotra |
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Designation |
Senior Vice President |
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Name |
Mr. C. V. Narayana Rao |
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Designation |
Vice President |
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Name |
Mr. Ranjan Chakraborthy |
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Designation |
Vice President |
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Name |
Dr. N. R. Srinivas |
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Designation |
Vice President |
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Name |
Dr. Javed Iqbal |
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Designation |
Distinguish Research Scientist |
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Name |
Mr. Jaspal Singh Bajwa |
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Designation |
President |
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Name |
Dr. Jayaram Chigurupati |
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Designation |
Executive Vice President |
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Name |
Dr. G. Om Reddy |
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Designation |
Senior Vice President |
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Name |
Mr. B.R. Reddy |
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Designation |
Senior Vice President |
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Name |
Mr. Arvind Vasudeva |
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Designation |
Vice President |
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Name |
Dr. M. Satyanarayana Reddy |
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Designation |
Vice President |
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Name |
Dr. R. Buchi Reddy |
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Designation |
General Manager |
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Brief Profile of Dr. K. Anji Reddy:
He is the founder
and the Executive Chairman of Dr. Reddy’s Laboratories Limited. He is also the
founder of the Dr. Reddy’s Group, Dr. Reddy’s Research Foundation and Dr.
Reddy’s Foundation for Human and Social Development. He is the chairman of the
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 03.08.2007
Category
|
No. of shares
|
% of shareholding
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promoters’ holdings
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Individuals |
4489584 |
2.67 |
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Companies |
37798290 |
22.49 |
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Sub Total |
42287874 |
25.16 |
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Indian Financial
Institutions |
20853198 |
1241 |
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Banks |
848.089 |
0.50 |
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Mutual funds |
7031737 |
4.18 |
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|
28733024 |
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Foreign
Holdings |
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Foreign
Institutional Investors |
43852039 |
26.09 |
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NRIs |
3434003 |
2.04 |
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American Depository Receipts / Foreign
National |
25054870 |
14.90 |
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Sub Total |
72340912 |
4304 |
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Indian Public and Corporate |
24735632 |
14.72 |
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Grand Total |
168097442 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturers and
Sellers of Bulk Drugs, Formulations and Diagnostic Reagents and Kits. |
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Products : |
Item Code No. [ITC Code] 29419003 Product Description
Ciprofloxacin Hydrochloride Item Code No. [ITC Code] 29420001 Product Description
Norfloxacin Item Code No. [ITC Code] 30049038 Product Description
Omerprazole |
PRODUCTION STATUS
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Class
of Goods |
Unit |
Actual Production |
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Formulations |
Million Units |
2816 |
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Active Pharmaceutical ingredients and intermediates [API] |
Tones |
3101 |
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Generics |
Million Units |
1939.48 |
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Biotechnology – on single shift basis |
Grams |
73 |
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Custom Pharmaceutical Services |
Kilograms |
219200 |
GENERAL INFORMATION
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No. of
Employees : |
1449 |
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Bankers : |
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Banking Relations : |
Good |
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Auditors : |
Bharat S. Raut
and Company Chartered
Accountants |
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Associates : |
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Subsidiaries : |
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Membership : |
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CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
|
100000000 |
Equity Shares |
Rs. 5/- each |
Rs. 500.000 millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
839600000 |
Equity Shares |
Rs.10/- each |
Rs.839.600 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
839.600 |
388.473 |
382.600 |
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2] Share Application Money |
0.000 |
0.000 |
0.000 |
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3] Reserves & Surplus |
42894.000 |
22237.944 |
20358.200 |
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4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
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NETWORTH |
43733.600 |
22621.417 |
20740.800 |
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LOAN FUNDS |
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1] Secured Loans |
19.200 |
1451.285 |
32.700 |
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2] Unsecured Loans |
3279.800 |
7787.410 |
2699.700 |
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TOTAL BORROWING |
3299.000 |
9238.695 |
2732.400 |
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DEFERRED TAX LIABILITIES |
0..000 |
530.847 |
0.000 |
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TOTAL |
47032.600 |
32390.959 |
23473.200 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
6820.400 |
5618.151 |
5625.400 |
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Capital work-in-progress |
2806.100 |
1129.160 |
601.300 |
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INVESTMENT |
8302.100 |
8217.937 |
3584.600 |
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DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
4875.800
|
4430.968 |
3038.100 |
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Sundry Debtors |
10557.000
|
5812.160 |
4176.400 |
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Cash & Bank Balances |
14567.100
|
6509.429 |
8917.200 |
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Other Current Assets |
0.000
|
0.000 |
0.000 |
|
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Loans & Advances |
10285.600
|
6776.456 |
2679.000 |
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Total
Current Assets |
40285.500
|
23529.013 |
18810.700 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
7319.500
|
5532.648 |
4515.000 |
|
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Provisions |
3862.000
|
570.654 |
633.800 |
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Total
Current Liabilities |
11181.500
|
6103.302 |
5148.800 |
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Net Current Assets |
29104.000
|
17425.711 |
13661.900 |
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MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
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TOTAL |
47032.600 |
32390.959 |
23473.200 |
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PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2007 |
|
31.03.2005 |
|
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Sales Turnover |
40472.200 |
21365.711 |
17299.700 |
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Other Income |
1150.300 |
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Total Income |
41622.500 |
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Profit/(Loss) Before Tax |
13658.500 |
2637.646 |
443.600 |
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|
Provision for Taxation |
1889.900 |
526.407 |
(211.000) |
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Profit/(Loss) After Tax |
11768.600 |
2111.239 |
654.600 |
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Earnings in Foreign Currency : |
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Export Earnings |
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Commission Earnings |
NA |
12100.041 |
9197.355 |
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Other Earnings |
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Total Earnings |
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Imports : |
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Raw Materials |
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Stores & Spares |
NA |
2744.535 |
2282.872 |
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Capital Goods |
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Others |
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Total Imports |
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Expenditures : |
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Cost of Goods Sold |
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|
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Manufacturing Expenses |
2971.900 |
1720.500 |
1422.200 |
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Administrative Expenses and Selling Expenses |
7532.400 |
5487.700 |
5052.000 |
|
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Raw Material Consumed |
1040.18 |
7166.700 |
5039.600 |
|
|
Excise Duty |
896.600 |
987.200 |
768.000 |
|
|
Employee Cost |
2616.100 |
1995.400 |
1771.300 |
|
|
Interest and Financial Charges |
519.600 |
246.200 |
127.400 |
|
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Power & Fuel |
578.300 |
482.300 |
432.000 |
|
|
Depreciation & Amortization |
1335.000 |
1113.300 |
924.600 |
|
Total Expenditure |
17490.080 |
19199.300 |
15537.100 |
|
QUARTERLY
|
PARTICULARS |
|
|
30.06.2007 1st
Quarter |
|
Sales Turnover |
|
|
7398.800 |
|
Other Income |
|
|
598.500 |
|
Total Income |
|
|
7997.300 |
|
Total Expenditure |
|
|
5863.600 |
|
Operating Profit |
|
|
2133.700 |
|
Interest |
|
|
58.200 |
|
Gross Profit |
|
|
2075.500 |
|
Depreciation |
|
|
349.600 |
|
Tax |
|
|
127.400 |
|
Reported PAT |
|
|
1456.900 |
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
0.19 |
0.28 |
0.08 |
|
Long Term Debt Equity Ratio |
0.02 |
0.04 |
0.01 |
|
Current Ratio |
2.20 |
1.85 |
2.64 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
3.45 |
2.05 |
1.79 |
|
Inventory |
8.70 |
5.64 |
5.79 |
|
Debtors |
4.94 |
4.21 |
3.78 |
|
Interest Cover Ratio |
27.29 |
10.39 |
4.48 |
|
Operating Profit Margin (%) |
38.33 |
17.44 |
9.19 |
|
Profit Before Interest and Tax Margin (%) |
35.03 |
12.15 |
3.51 |
|
Cash Profit Margin (%) |
32.38 |
14.12 |
9.71 |
|
Adjusted Net Profit Margin (%) |
29.08 |
8.83 |
4.02 |
|
Return on Capital Employed (%) |
35.94 |
9.24 |
2.56 |
|
Return on Net Worth (%) |
35.47 |
8.57 |
3.18 |
LOCAL AGENCY FURTHER INFORMATION
Company Details:
Subject established in 1984, is a leading Indian pharmaceutical
company with vertically integrated operations. The company develops,
manufactures and markets a wide range of pharmaceutical products in
Dr. Reddy's actively pursues a basic research programme under the aegis
of Dr. Reddy's Research Foundation (DRF). DRF focuses on cancer, diabetes,
bacterial infections and pain management. The company has several
pharmaceutical products in development, three of which are in clinical trials
and two have completed pre-clinical testing.
The merger with Cheminor Drugs (the swap ratio at nine shares of Dr. Reddy's
Laboratories for 25 shares of Cheminor), has made DRL the third largest
pharmaceutical company in Inida with participation in every element of the
value chain. DRL is a major player in the domestic finished dosages market and
many of its brands are leaders.The company has a formidable presence in the
highly regulated markets of the
The company has successfully entered the
The company issued 4,301,076 GDSs representing 4,301,076 equity shares of
the Company, par value Rs.10 ('Shares'). The GDSs are listed on the Luxembourg
Stock Exchange and each GDS represents one Share. As of May 4, 2001, there were
1,789,285 GDSs outstanding representing 1,789,285 Shares.
The company entered the global generic market with exports of
Ranitidine-75 mg and Fluoxetine to
In April 2001, as a first step towards taking its molecules through
clinical development on its own, Dr. Reddy's Laboratories has selected Simbec
Research Limited, a well-known UK-based Clinical Research Organization (CRO),
for conducting clinical trials of DRF 4832. DRF 4832 is a PPAR agonist for
treatment of cardiovascular complications.
In May 2001, Novartis Pharma AG and Dr. Reddy's Laboratories announced
that they have entered a licensing agreement for a novel anti-diabetes agent.
Under terms of the agreement Dr. Reddy's will grant Novartis worldwide
exclusive rights to development and commercialisation of their insulin
sensitiser DRF 4158 in type 2 diabetes, in return for up to USD 55 million in
upfront and milestone payments for specific clinical and regulatory endpoints,
as wellas royalties. Dr. Reddy's will have co-promotion rights for DRF 4158 in
In May 2002, DRL has completed phase I clinical trials on its anti-cancer
compound DRF-1042. This is companies first new chemical entity (NCE) in the
cancer area. With the approval of Shareholders the Face value of the company
shares has been reduced to Rs.5 per share . The Scheme of merger with erstwhile
American Remedies Ltd was fully completed and shares were exchanged for one
share of the company for every 12 shares in erstwhile ARL.
In Apirl 2004 the company has launched Redotil, the first anti-hypersecretory
agent for the management of acute diarrhea and the first Dutas for the
treatment of enlarged prostate,which is a oral treatment, in
During September 2005 the company has planned about the formation of
India's first integrated drug development company Perlecan Pharma Pvt Ltd with
the equity capital commitment of USD 52.5 Million from India's leading Captial
Ventures.
In the year 2005 the company has entered into a partnership with ICICI
Venture Funds Management Company for commericalisation of the company's US
ANDAs in the generics business. The company has acquired Trigenesis
Therapeutics, Inc., a
The company has increased its installed capacity of Biotechnology by 30 Grams
and with this the total installed capacity of Biotechnology has increased to
370 Grams.
In 2006, The company involved de-bottlenecking of existing capacities and
adding new lines, especially to meet growing international demand for generics
and customs pharmaceuticals services. During the year company has made two
major acquisitions. The first was the purchase of Roche's API Business, its
order-book and its manufacturing plant at
Directors Report:
SHARE
CAPITAL
The paid up Share
Capital of the Company increased by Rs. 456.088 millions in the financial year
ended March 31, 2007
MANAGEMENT DISCUSSION
AND ANALYSIS
2006-07 has been a memorable year for Dr. Reddy's. The predominant story
has been its excellent financial performance. It grew the topline more than two
and a half times to achieve a consolidated revenue of Rs. 65,095 million - thus
crossing the historic U.S.$. 1.5 billion milestone1. Profit after tax (or net
income in US GAAP parlance) increased more than four times to Rs. 9,327 million
(
This performance has been due to the interplay of several factors - all of
which have been due to the Company's successes in leveraging the different
building blocks of growth.
There are many such building blocks: creating a lean manufacturing
organization across all its businesses; strengthening Dr. Reddy's position in existing
markets, in developing new geographies; building infrastructure to drive
greater production; creating a significantly faster and more focused product
development process; creating wider technical capabilities; leveraging the new
acquisitions; and optimizing efforts across the entire Company through
proactive and seamless information technology networks.
While Dr. Reddy's core businesses recorded consistent year-on-year growth - and
the German and Mexican acquisitions widened the Company's market presence and
customer portfolio - the key highlight of 2006-07 has been the success of new
launches in U.S. Generics market. Displaying innovative deal making
capabilities, the Company's business development team ensured that North
American Generics contributed to approximately a third of Dr. Reddy's
consolidated revenues. This was significantly driven by new launches in the
* In June 2006, the Company launched simvastatin and finasteride, the
generic versions of Zocor(R) and Proscar(R) respectively, as authorized generic
products of Merck. This authorized generic transaction was the first of its
kind - not only by an Indian company in the
- In December 2006,
Dr. Reddy's launched in the
* Among other launches, the key one was fexofenadine, the generic version
of Allegra(R), which was a launch at risk'. The Company's market share at the
end of the year was 11 per cent, and the product contributed significantly to
the revenues and profitability. Dr. Reddy's has good reasons to believe that
the U.S. Courts will ultimately decide in favor of the generic companies that
have launched at risk'.
- While the
financial results speak for themselves, the Company's underlying business
drivers have also been strengthened. Here are some facts:
* Dr. Reddy's cumulative Drug Master File (DMF) and Abbreviated New Drug
Application (ANDA) filings in the
* The Formulations business continues to achieve high double-digit growth
across all key geographies. Within
* In the Active Pharmaceutical Ingredients (API or Bulk Drugs') business,
customer relationships were deepened and the product mix for the year was
targeted in favor of high margin regulated markets. This helped to offset the
pricing volatility in the less regulated markets. This helped revenues from API
to grow by 44 per cent in 2006-07.
* The acquisitions in
* During the year, the Company invested Rs. 4,477 million on
manufacturing, R&D facilities and other capital expenditure - the highest
level of investment in a single financial year up to date These investments
will create the capacity to support Dr. Reddy's strategic growth agenda. The
formulations manufacturing facility at Baddi (Himachal Pradesh) is now fully
operational, and is expected to generate significant tax savings for the
future.
* To support high growth and fund new organic and inorganic initiatives,
the Company issued additional American Depositary Shares (ADSs) under the
accelerated filing procedure mandated by the U.S. Securities Exchange
Commission (SEC), which generated net funds of Rs. 10,030 million. The
liquidity position is healthy, as most of the higher cost, shorter term debt
has been retired out of the operational cash surplus generated during the
year.
Detailed discussion of
business-wise performance occur in later sections.
TRENDS IN GLOBAL MARKETS
Note: Global market share numbers referred
to in this and subsequent sections are based on latest available reports from
market research agencies such as IMS Health Inc.
In calendar year 2006, the global pharmaceutical market grew 7 per cent,
at constant exchange rates, to
Pharmaceutical growth continued to be driven
by increased longevity, strong economic performances throughout OECD countries
and emerging markets, and innovative new products. During 2006, 31 new
molecular entities were launched in key markets. Overall, products launched
between 2001 and 2005 contributed revenue of
There has been a visible shift in growth from mature to emerging markets,
and from primary care classes to biotech and specialist-driven therapies. As an
example, in 2006, specialist-driven products contributed 62 per cent of the
world market's growth, compared to 35 per cent in 2000. Generics represented
more than half of the volume of pharmaceutical products sold in seven key world
markets - the
GLOBAL REGIONAL PERFORMANCE
* In 2006, North America, which accounts for 45 per cent of global
pharmaceutical sales, grew by 8.3 per cent to
* The five major European markets (
*
* Pharmaceutical sales in
*
Overall, 27 per cent of total market growth is now coming from countries which
have per capita Gross National Income of less than U.S.$. 20,000. In 2001,
these lower-income countries contributed to just 13 per cent of growth.
Despite continued expansion of global pharmaceutical markets, underlying
dynamics continue to alter the landscape. In 2006, products with sales in
excess of
TRENDS IN
Note:
Information in this section is based on the Indian Pharmaceutical Overview
Report, published by ORG IMS Research Private Ltd. for the year ended December
2006.
Compared to single-digit growth in the global market,
At the level of corporations, there were some changes in the ranking of
companies in the Indian market. Ranbaxy (ranked number 3 in 2005) displaced
Cipla for the number 2 slot. Dr. Reddy's once again entered the Top-10.
Despite its high base, acute segment bounced back with high growth rates, while
the chronic segment continued with its double-digit growth thanks to new
introductions, price increase and greater volumes of existing products. The
acute segment grew by 18 per cent during 2006, versus 6 per cent and 8 per cent
in 2004 and 2005, respectively; the chronic segment grew by 17 per cent,
compared to 11 per cent growth for the previous two years.
During 2006, rural markets increased their share in total Indian sales to
21 per cent - up from 16 per cent in 2004, and 18 per cent in 2005. As rural incomes
continue to increase, especially in the north, west and south of
DR. REDDY'S MARKET
PERFORMANCE
REVENUES
The
Company's consolidated revenues grew by 168 per cent to Rs. 65,095 million in
2006-07, or
Excluding authorized generics and acquisitions, revenues grew by 58 per
cent, from Rs. 22,757 million in 2005-06 to Rs. 35,881 million in
2006-07.
The Company witnessed major shifts in its revenue composition.
International operations accounted for 86 per cent of total revenues in
2006-07, compared to 66 per cent a year earlier. North America (
GENERICS
Generics revenues increased from Rs. 4,056 million in 2005-06 to Rs.
33,224 million in 2006-07. This was primarily due to contribution from
authorized generic products, revenues from new product launches in North
America, and full year consolidation of revenues from the betapharm acquisition
in
North American revenue increased from Rs. 1,631 million in 2005-06 to Rs.
23,617 million in 2006-07, thanks to authorized generics and new product
launches. Simvastatin and finastride, launched as authorized generic versions
of Zocor(R) and Proscar(R) respectively (under the agreement with Merck),
contributed Rs. 15,813 million. After the end of 180-day exclusivity period,
the Company launched its own generic version of simvastatin. In 2006-07,
company acquired an average share of 24 per cent of the simvastatin
market.
New products, other than authorized generics, launched during the year contributed
Rs. 5,657 million to revenue. The most prominent launches were ondansetron and
fexofenadine. Ondansetron, the generic version of Zofran(R), was launched in
the last week of December 2006 with 180-day marketing exclusivity, and
contributed Rs. 2,890 million. Dr. Reddy's has already acquired 62 per cent
market share, despite the presence of an authorised generics version launched
by Sandoz. Fexofenadine, the generic version of Allegra(R), contributed Rs.
2,429 million. The rest of the Company's North American generics portfolio
witnessed significant volume growth which more than offset pricing
pressure.
Revenues from Europe grew from Rs. 2,422 million in 2005-06 to Rs. 9,603
million in 2006-07 - largely on account of the full year's revenue from
betapharm in Germany, compared to 28 days during 2005-06. Excluding betapharm
and new operations in
As of April 1, 2007, an additional law to regulate the German health care
system took effect. This law due to its comprehensive regulations is likely to
lead to significant structural changes of the German health care system and the
market structures which depend on it. The new law empowers insurance companies
to enter into contracts with suppliers of generics. It also requires the
doctors to prescribe and pharmacists to dispense drugs covered by contracts
with insurance companies.
CUSTOM PHARMACEUTICAL
SERVICES (CPS)
Revenue in this segment increased from Rs. 1,327 million in 2005-06 to
Rs. 6,600 million in 2006-07. Current year sales include the full year's
revenues of the Mexican acquisition amounting to Rs. 5,397 million - versus one
quarter's revenue of Rs. 805 million last year. On an annualized basis, growth
of revenues in
OUTLOOK
Compared to the superlative financial performance in 2006-07, the year
2007-08 poses challenges. In 2006-07, Dr. Reddy's enjoyed benefits of multiple
upsides in the form of exclusivities and semiexclusivities in its Generics and
API businesses. Similar upsides will be limited in 2007-08. However, the base
business will continue to show strong growth in line with the capabilities and
resources that have been built up over the years.
The Company's core businesses of API and Formulations are expected to be
consistent in their revenue growth and consequent margin contribution. North
American Generics is also expected to strengthen its position as a standalone
profitable business with a number of new launches planned in 2007-08. Generics
business in
In line with its stated philosophy and strategy, Dr. Reddy's will
continue to pursue both the organic as well as inorganic options to achieve
faster growth. It expects to create value for the shareholders with focused
efforts in business development, mutually rewarding partnerships and pipeline
enhancement. Further, the Company has committed significant investments in the
infrastructure and facilities for almost all its businesses to support
potential revenue scale-ups in the near future. In addition, there have been
major initiatives at improving productivity, systems and practices as a part of
execution excellence throughout the entire operations.
All the building blocks for growth are in place. Therefore, the outlook
for 2007-08 is encouraging. And the Company looks forward to continuing a
healthy financial performance in the future.
Press Release:
Dr. Reddy's
launches Glimy MP 1 and Glimy MP2.
Triple drug
combination ideal to address the triple defects in diabetes
Glimy MPTM is
available in dosages of 1mg (Glimy MP1) and 2mg (Glimy MP2), in sizes of 10tabs
/ strip and 10strips/pack. The triple drug combination offers the range of
options available for the doctor to address their needs in different situations
in the management of type 2 diabetes.
Notes to the
editor:
- The triple
drug combination oral hypoglycemic agents market is about Rs 62 crore in
size and has grown by 176% in the last one year (as per ORG MAT April’07)
- Glimy MPTM is
a new brand extension. Existing products of Dr.Reddy’s are GLIMY
(Glimepiride 1,2,3,4 mg tabs), GLIMY-M (Glimepiride1 & 2 mg+ Metformin
ER 500mg) and GLIMY-P (Glimepiride + Pioglitazone)
- Dr.Reddy’s is
the first company to emphasize on HbA1C(Glycosylated Hemoglobin level)
target as < 6.5%
- Glimy MPTM
helps patients achieve the level of HbA1C < 6.5%
- Other brands
of Dr.Reddy’s in this segment are ReclideTM & ReclimetTM
Brief mode of action of Glimy MPTM - Diabetes is a
metabolic disease with three anomalies i.e. reduced insulin secretion,
decreased insulin sensitivity & increased hepatic glucose production.
- Glimepiride
works by increasing the insulin secretion (act on Pancreas), Metformin
acts by decreasing the hepatic glucose output (act on Liver), and
Pioglitazone acts by increasing the insulin sensitivity (act on peripheral
tissues).
- Thus the
triple combination addresses all the three anomalies in diabetes &
thereby helps patients to achieve the target goal of HbA1C <6.5.
Disclaimer:
This press release
includes forward-looking statements, as defined in the
About Dr. Reddy's:
Established in
1984, Dr. Reddy's Laboratories (NYSE: RDY) is an emerging global pharmaceutical
company with proven research capabilities. The Company is vertically integrated
with a presence across the pharmaceutical value chain. It produces finished
dosage forms, active pharmaceutical ingredients and biotechnology products and
markets them globally, with focus on
Rheoscience and Dr. Reddy’s commence the first Phase III trial of
Balaglitazone (DRF 2593)
- Balaglitazone is a
novel TZD candidate for the treatment of diabetes mellitus
- First Global Phase III
clinical trials of a Dr. Reddy’s new chemical entity
Rheoscience A/S and Dr. Reddy’s Laboratories (NYSE:RDY) today announced that the first patient has been dosed in a Phase III study with Balaglitazone (DRF2593-307), which is an insulin sensitizer that acts as a partial PPAR (peroxisome proliferator-activated receptor) gamma agonist. The study is the first in a series of planned Phase III trials which will investigate the safety and efficacy of Balaglitazone, as an oral anti-diabetic drug.
Balaglitazone
is a second generation of PPAR gamma agonist with only partial agonistic
properties, which in clinical phase II studies have shown to have glucose
lowering capabilities and to be body-weight neutral. In preclinical
experiments, balaglitazone has been shown to cause less fluid retention than
full PPAR gamma agonists.
In
the trial, Balaglitazone will be tested in a 6 month double-blinded, randomised,
placebo-controlled multicenter trial in which type 2 diabetes patients will be
given daily doses of either 10 or 20 mg of Balaglitazone versus the active
comparator Actos® (45 mg/day) as an add on to stable insulin treatment. The
primary clinical end-point of the study is a glucose lowering effect assessed
as a change in haemoglobin A1c (HbA1c) levels – the preferred standard measure
of a patient’s blood glucose control over time. The study is designed to show
non-inferiority to Actos®. As a secondary end point, major emphasis will be
focused on assessing the safety profile, including its impact on weight gain
and oedema.
A
complete Phase III programme has been designed in which the glucose lowering
effects of Balaglitazone will be tested either alone, or in combination with a
number of other oral agents such as metformin and sulfonylurea.
Balaglitazone
is being developed under a co-development agreement between
About Rheoscience
Rheoscience is a Danish biopharmaceutical company focused on the discovery and development of novel pharmaceutical products for the treatment of metabolic diseases such as diabetes and obesity. Rheoscience has unparalleled experience in developing drugs for metabolic disorders and draws on this to advance its own pipeline of innovative compounds and to underpin its successful, profitable contract research business.
Rheoscience’s
lead product is the oral anti-diabetic drug, balaglitazone, which is entering
Phase III clinical trials for the treatment of type 2 diabetes, a disease that
affects approximately 6% of the global adult population aged 20-79 years.
Balaglitazone is being co-developed with Dr Reddy’s.
Rheoscience’s
pipeline also includes an advanced pre-clinical program around a mimic of an
intestinal hormone that makes people feel ‘full’ after eating and is intended
for the treatment of obesity.
About Dr. Reddy’s
Dr.
Reddy’s Laboratories was established in 1984 in
Disclaimer
This
press release includes forward-looking statements, as defined in the
Dr. Reddy's Contact Information:
Investors and Financial Analysts:
Nikhil Shah at nikhilshah@drreddys.com or on +91-40-23731946 ext. 308
Media:
Mythili Mamidanna at mythilim@drreddys.com or on +91-40-66511620
Rheoscience Contact Information:
Philip Just Larsen
Chief
Executive Officer
Rheoscience
A/S
Contact:
+45 44501 960
Notes to the editor:
- Balaglitazone
is an insulin sensitizer that acts as a partial PPAR (peroxisome
proliferator-activated receptor) gamma agonist being developed for the
treatment of type 2 diabetes. Balaglitazone is a novel compound and
belongs to the class of thiazolidinediones (TZD)
- Type 2
diabetes is the most common form of diabetes. In type 2 diabetes, either
the body does not produce enough insulin or the cells ignore the insulin.
- Type 2
diabetes is a disease that affects approximately 6% of the global adult
population aged 20-79 years. and represents an area with significant unmet
medical need. The World Health Organization (WHO) estimates that more than
180 million people worldwide have diabetes. This number is likely to more
than double by 2030.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources including
but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist organization
or whom notice had been received that all financial transactions involving
their assets have been blocked or convicted, found guilty or against whom a
judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.39.33 |
|
|
1 |
Rs.79.74 |
|
Euro |
1 |
Rs.55.74 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
10 |
|
--PROFITABILIRY |
1~10 |
6 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
YES |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
79 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General unfavourable
factors will not cause fatal effect. Satisfactory capability for payment of
interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|