Dr. Reddy's Laboratories
Encyclopedia
Dr. Reddy's Laboratories Ltd. is an integrated pharmaceutical company focused on providing medicines through its three business segments: Global Generics segment, Pharmaceutical Services and Active Ingredients (PSAI) segment and Proprietary Products segment. The company was founded by Dr. Anji Reddy, who had previously worked in the publicly owned Indian Drugs and Pharmaceuticals Limited
, of Hyderabad, India. Dr. Reddy's manufactures and markets a wide range of pharmaceuticals in India and overseas. The company has over 190 medications, 60 active pharmaceutical ingredients (APIs) for drug manufacture, diagnostic kits, critical care
, and biotechnology products.
Dr. Reddy's began as a supplier to Indian drug manufacturers, but it soon started exporting to other less-regulated markets that had the advantage of not having to spend time and money on a manufacturing plant
that that would gain approval from a drug licensing body such as the U.S. Food and Drug Administration (FDA). By the early 1990s
, the expanded scale and profitability from these unregulated markets enabled the company to begin focusing on getting approval from drug regulators for their formulations and bulk drug manufacturing plants in more-developed economies. This allowed their movement into regulated markets such as the US
and Europe
.
By 2007, Dr. Reddy's had six FDA plants producing active pharmaceutical ingredients in India and seven FDA-inspected and ISO 9001 (quality) and ISO 14001 (environmental management) certified plants making patient-ready medications – five of them in India and two in the UK.
In 2010, the family-controlled Dr Reddy's denied that it was in talks to sell its generics business in India to US pharmaceutical giant Pfizer
, which had been suing the company for alleged patent infringement after Dr Reddy's announced that it intended to produce a generic version of Atorvastatin
, marketed by Pfizer as Lipitor, an anti-cholesterol
medication. Reddy's was already linked to UK pharmaceuticals multinational Glaxo Smithkline.
Within a year, Reddy's became the first Indian company to export the active ingredients for pharmaceuticals to Europe. In 1987, Reddy's started to transform itself from a supplier of pharmaceutical ingredients to other manufacturers into a manufacturer of pharmaceutical products.
in 1992. There, Dr. Reddy's formed a joint venture with the country's biggest pharmaceuticals producer, Biomed
. They pulled out in 1995 amid accusations of scandal, involving "a significant material loss due to the activities of Moscow's branch of Reddy's Labs with the help of Biomed's chief executive". Reddy's sold the joint venture to the Kremlin-friendly Sistema group.
In 1993, Reddy's entered into a joint venture in the Middle East
and created two formulation units there and in Russia. Reddy's exported bulk drugs to these formulation units, which then converted them into finished products. In 1994, Reddy's started targeting the US generic market by building state of art manufacturing facility.
Reddy's also invested heavily in building R&D labs and is the only Indian company to have significant R&D being undertaken overseas. Dr. Reddy's Research Foundation was established in 1992 and dedicated to research in area of new drug discovery. At first, the foundation's drug research strategy revolved around searching for analogues. Focus has since changed to innovative R&D, hiring new scientists, especially Indian students studying abroad on doctoral and post-doctoral courses. In 2000, the Foundation set up an American
lab in Atlanta, dedicated to discovery and design of novel therapeutics. The lab is called Reddy US Therapeutics Inc (RUSTI) and its main aim is the discovery of next-generation drugs using genomics
and proteomics
. Reddy's research thrust focused on large niche areas in western markets – anti-cancer
, anti-diabetes, cardiovascular and anti-infection drugs.
Reddy's international marketing successes were built on a strong manufacturing base which itself was a result of inorganic growth
through acquisition of international and national facilities. Reddy's merged Cheminor Drug Limited (CDL) with the primary aim of supplying active pharmaceutical ingredients to the technically demanding markets of North America
and Europe
. This merger also gave Reddy's an entry into the value-added generics business in the regulated markets of APIs.
s to Novo Nordisk
, a Danish
pharmaceutical company.
It strengthened its Indian manufacturing operations by acquiring American Remedies Ltd. in 1999. This acquisition made Reddy’s the third largest pharmaceutical company in India, after Ranbaxy and Glaxo (I) Ltd., with a full spectrum of pharmaceutical products, which included bulk drugs, intermediates, finished dosages, chemical synthesis, diagnostics and biotechnology.
Reddy’s started exploiting Para 4 filing as a strategy in bringing new drugs to the market at a faster pace. In 1999 it submitted a Para 4 application for Omeprazole
, the drug that had been the cornerstone of its success in India. In December 2000, Reddy’s had undertaken its first commercial launch of a generic product in the USA., and its first product with market exclusivity was launched there in August 2001. The same year, it also became the first non-Japan
ese pharmaceutical company from the Asia-Pacific
region to obtain a New York Stock Exchange
listing, ground-breaking achievements for the Indian pharmaceutical industry.
In 2001 when Reddy’s became the first Indian company to launch the generic drug, fluoxetine
(a generic version of Eli Lilly and Company
’s Prozac) with 180 day market exclusivity in the USA. Prozac had sales in excess of $1 billion per year in the late nineties. Barr Laboratories of the U.S. obtained exclusivity for all of the approved dosage forms (10 mg, 20 mg) except one (40 mg), which was obtained by Reddy’s. Lilly had numerous other patents surrounding the drug compound and had already enjoyed a long period of patent protection. The case to allow genertic sales was heard twice by the Federal Circuit Court
, and Reddy’s won both hearings. Reddy’s generated nearly $70 million in revenue during the initial six-month exclusivity period. With such high returns at stake, Reddy’s was gambling on the success of the litigation; failure to win the case could have cost them millions of dollars, depending on the length of the trial.
The fluoxetine marketing success was followed by the American launch of Reddy's house-branded ibuprofen
tablets in 400, 600 and 800 mg sizes, in January 2003. Direct marketing
under the Reddy’s brand name represented a significant step in the company’s efforts to build a strong and sustainable US generic business. It was the first step in building Reddy’s fully-fledged distribution network in the US market.
of $132.8 million, secured by American Depositary Receipt
s. At that time the company also became listed on the New York Stock Exchange
. Funds raised from the initial public offering helped Reddy’s move into international production and take over technology-based companies.
In 2002, Reddy’s started its Europe
an operations by acquiring two pharmaceutical firms in the United Kingdom
. The acquisition of BMS Laboratories and its wholly owned subsidiary, Meridian UK, allowed Reddy’s to expand geographically into the European market. In 2003 Reddy’s also invested $5.25 million (USD) in equity capital
into Bio Sciences
Ltd.
Auriegene Discovery Technologies, a contract research company, was established as a fully owned subsidiary of Reddy’s in 2002. Auriegene's objective was to gain experience in drug discovery through contract research for other pharmaceutical companies. Reddy’s entered into a venture investment agreement with ICICI Bank
, an established Indian banking company. Under the terms of the agreement, ICICI Venture agreed to fund the development, registration and legal costs related to the commercialization of ANDAs on a pre-determined basis. Upon commercialization of these products, Dr. Reddy's pays ICICI Venture royalty on net sales for a period of 5 years.
, Reddy's had successfully grown into a fully integrated pharmaceutical company. It had been less than a decade since the beginning of its expansion in the mid-nineties. The company's growth so far had been founded on a targeted program of inorganic growth and investments in process R&D. It had chosen a "high risk-high gain" strategy for growth by going into direct competition
with existing patent holders. A major challenge for Reddy’s in the early 2000s was to find ways to de-risk its overall strategy. The company elected to expand globally, and went on a spree of acquisitions.
In March 2002, Dr. Reddy’s acquired BMS Laboratories, Beverley
, and its wholly owned subsidiary Meridian Healthcare, for 14.81 million Euro
s. These companies deal in oral solids, liquids and packaging, with manufacturing facilities in London
and Beverley
in the UK. Recently, Dr. Reddy’s entered into an R&D and commercialization agreement with Argenta Discovery Ltd., a private drug development company based in the UK, for the treatment of COPD.
With growing success in the generics market, Reddy’s also came to realize the need for developing marketing and distribution capabilities in the USA. Reddy’s was considering several options in 2003 for marketing their hypertension
product. The company already had one tie-up with Pharmaceutical Resources, Inc. to market Fluoxentine 40 mg tablets. It also had a tie-up with Par Pharmaceuticals Inc., to produce and market over-the-counter drug
s in the U.S. In addition to the United States, Reddy’s generics business had established a presence in the UK, which became a platform for expansion into other countries in Europe. Its API business had sales in over 60 countries, with the US and India being the most significant revenue contributors. The branded formulations business was active in over 30 countries and Reddy’s was a significant player in the Indian and Russian markets. The business planned to significantly increase its presence in China
, Brazil
and Mexico
in the near future.
Dr. Reddy’s entered into a 10-year agreement with Rheoscience A/S of Denmark
for the joint development and commercialization of Balaglitazone (DRF-2593), a molecule for the treatment of type-2 diabetes. Rheoscience holds this product’s marketing rights for the European Union
and China, while the rights for the US and the rest of the world will be held by Dr. Reddy’s. Dr. Reddy’s conducted clinical trials of its cardiovascular drug RUS 3108 in Belfast
, Northern Ireland
, in 2005. The trials were conducted to study the safety and the pharmacokinetic profiles of the drug, which is intended for the treatment of atherosclerosis, a major cause of cardiovascular disorders.
Dr. Reddy’s entered into a marketing agreement with Eurodrug Laboratories, a pharmaceutical company based in Netherlands
, for improving its product portfolio for respiratory diseases. It introduced a second-generation xanthine bronchodilator, Doxofylline, which is used for the treatment of asthma
and chronic obstructive pulmonary disease (COPD) patients.
In 2004, Reddy’s acquired Trigenesis Therapeutics Inc; a US-based private dermatology company. This acquisition gave Reddy’s access to proprietary products and technologies in the dermatology
sector.
Dr. Reddy’s Para 4 application strategy for generic business received a severe setback when Reddy’s lost the patent challenge in the case of Pfizer
’s drug Norvasc (amlodipine maleate), a drug indicated for the treatment of hypertension
and angina. The cost involved in patent litigation as well as the unexpected loss of the patent challenge affected Reddy’s plans to start speciality business in the US generic markets.
In March 2006, Dr. Reddy’s acquired Betapharm Arzneimittel GmbH from 3i
for 480 million Euros. This is one of the largest-ever foreign acquisitions by an Indian pharmaceutical company. Betapharm is Germany
’s fourth-largest generics pharmaceuticals, with a 3.5% market share
, including 150 active pharmaceutical ingredients.
Reddy’s has promoted India’s first integrated drug development company Perlecan Pharma Pvt Ltd together with ICICI ventures capital fund management company Ltd and Citigroup
Venture Capital
International growth partnership Mauritius
Ltd. The combined entity will undertake clinical development and out-licensing of new chemical entity
assets.
Dr. Reddy's is presently licensed by Merck & Co.
to sell an authorized generic version of the popular drug simvastatin
(Zocor) in the USA. Since Dr. Reddy's has a license from Merck, it was not subject to the exclusivity period on generic simvastatin.
As of 2006, Dr. Reddy’s Labs crossed $500 million USD in revenues, flowing from their APIs, branded formulations and generics segments; the former two segments account for almost 75% of revenues. Dr. Reddy's deals in and manages all the processes, from the development of the API to the submission of finished dosage dossiers to the regulatory agencies.
In 2009, the company did a U-turn and has handed over discovery research and related intellectual property to its Bangalore
-based subsidiary, with the possibility of spinning it off as a different entity altogether. "The company may be hoping to find a strategic partner in the future to share the risks and research funding."
In January 2010, Dr. Reddy's Laboratories announced that its first late-stage trial of the experimental diabetes drug Balaglitazone hit its primary endpoint for the reduction of blood glucose levels. Dr Reddy's claims the data "leaves the program on track to an eventual regulatory approval".
Indian Drugs and Pharmaceuticals Limited
Indian Drugs and Pharmaceuticals Limited is a large Indian government-owned pharmaceutical manufacturing company, incorporated on 5 April 1961 with the aim of achieving India's self-sufficiency in pharmaceuticals manufacturing. IDPL performed a pioneering role in the growth of the Indian drug...
, of Hyderabad, India. Dr. Reddy's manufactures and markets a wide range of pharmaceuticals in India and overseas. The company has over 190 medications, 60 active pharmaceutical ingredients (APIs) for drug manufacture, diagnostic kits, critical care
Intensive care medicine
Intensive-care medicine or critical-care medicine is a branch of medicine concerned with the diagnosis and management of life threatening conditions requiring sophisticated organ support and invasive monitoring.- Overview :...
, and biotechnology products.
Dr. Reddy's began as a supplier to Indian drug manufacturers, but it soon started exporting to other less-regulated markets that had the advantage of not having to spend time and money on a manufacturing plant
Factory
A factory or manufacturing plant is an industrial building where laborers manufacture goods or supervise machines processing one product into another. Most modern factories have large warehouses or warehouse-like facilities that contain heavy equipment used for assembly line production...
that that would gain approval from a drug licensing body such as the U.S. Food and Drug Administration (FDA). By the early 1990s
1990s
File:1990s decade montage.png|From left, clockwise: The Hubble Space Telescope floats in space after it was taken up in 1990; American F-16s and F-15s fly over burning oil fields and the USA Lexie in Operation Desert Storm, also known as the 1991 Gulf War; The signing of the Oslo Accords on...
, the expanded scale and profitability from these unregulated markets enabled the company to begin focusing on getting approval from drug regulators for their formulations and bulk drug manufacturing plants in more-developed economies. This allowed their movement into regulated markets such as the US
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
.
By 2007, Dr. Reddy's had six FDA plants producing active pharmaceutical ingredients in India and seven FDA-inspected and ISO 9001 (quality) and ISO 14001 (environmental management) certified plants making patient-ready medications – five of them in India and two in the UK.
In 2010, the family-controlled Dr Reddy's denied that it was in talks to sell its generics business in India to US pharmaceutical giant Pfizer
Pfizer
Pfizer, Inc. is an American multinational pharmaceutical corporation. The company is based in New York City, New York with its research headquarters in Groton, Connecticut, United States...
, which had been suing the company for alleged patent infringement after Dr Reddy's announced that it intended to produce a generic version of Atorvastatin
Atorvastatin
Atorvastatin , sold by Pfizer under the trade name Lipitor, is a member of the drug class known as statins, used for lowering blood cholesterol. It also stabilizes plaque and prevents strokes through anti-inflammatory and other mechanisms...
, marketed by Pfizer as Lipitor, an anti-cholesterol
Cholesterol
Cholesterol is a complex isoprenoid. Specifically, it is a waxy steroid of fat that is produced in the liver or intestines. It is used to produce hormones and cell membranes and is transported in the blood plasma of all mammals. It is an essential structural component of mammalian cell membranes...
medication. Reddy's was already linked to UK pharmaceuticals multinational Glaxo Smithkline.
Company history
Dr. Reddy's originally launched in 1984 producing generic medications. In 1986, Reddy's started operations on branded formulations. Within a year Reddy's had launched Norilet, the company's first recognized brand in India. Soon, Reddy's obtained another success with Omez, its branded omeprazole – ulcer and reflux oesophagitis medication – launched at half the price of other brands on the Indian market at that time.Within a year, Reddy's became the first Indian company to export the active ingredients for pharmaceuticals to Europe. In 1987, Reddy's started to transform itself from a supplier of pharmaceutical ingredients to other manufacturers into a manufacturer of pharmaceutical products.
International expansion
The company's first international move took it to RussiaRussia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
in 1992. There, Dr. Reddy's formed a joint venture with the country's biggest pharmaceuticals producer, Biomed
BIOMED
The Biomedical Research Institute was founded on 1 January 1999 to combine the expertise of the former Dr. L. Willems-Instituut with the Medical faculty of the University of Hasselt . The institute is located in Diepenbeek, Belgium.The research topics of the institute are auto-immune disorders, e.g...
. They pulled out in 1995 amid accusations of scandal, involving "a significant material loss due to the activities of Moscow's branch of Reddy's Labs with the help of Biomed's chief executive". Reddy's sold the joint venture to the Kremlin-friendly Sistema group.
In 1993, Reddy's entered into a joint venture in the Middle East
Middle East
The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far East...
and created two formulation units there and in Russia. Reddy's exported bulk drugs to these formulation units, which then converted them into finished products. In 1994, Reddy's started targeting the US generic market by building state of art manufacturing facility.
New drug discovery
Reddy's path into new drug discovery involved targeting speciality generics products in western markets to create a foundation for drug discovery. Development of speciality generics was an important step for the company's growing interest in the development of new chemical entities. The elements involved in creating a speciality generic, such as innovation in the laboratory, developing the compound, and sending the sales team to the market, are also stages in the development of a new specialty drug. Starting with speciality generics allowed the company to gain experience with those steps before moving on to creating brand-new drugs.Reddy's also invested heavily in building R&D labs and is the only Indian company to have significant R&D being undertaken overseas. Dr. Reddy's Research Foundation was established in 1992 and dedicated to research in area of new drug discovery. At first, the foundation's drug research strategy revolved around searching for analogues. Focus has since changed to innovative R&D, hiring new scientists, especially Indian students studying abroad on doctoral and post-doctoral courses. In 2000, the Foundation set up an American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
lab in Atlanta, dedicated to discovery and design of novel therapeutics. The lab is called Reddy US Therapeutics Inc (RUSTI) and its main aim is the discovery of next-generation drugs using genomics
Genomics
Genomics is a discipline in genetics concerning the study of the genomes of organisms. The field includes intensive efforts to determine the entire DNA sequence of organisms and fine-scale genetic mapping efforts. The field also includes studies of intragenomic phenomena such as heterosis,...
and proteomics
Proteomics
Proteomics is the large-scale study of proteins, particularly their structures and functions. Proteins are vital parts of living organisms, as they are the main components of the physiological metabolic pathways of cells. The term "proteomics" was first coined in 1997 to make an analogy with...
. Reddy's research thrust focused on large niche areas in western markets – anti-cancer
Cancer
Cancer , known medically as a malignant neoplasm, is a large group of different diseases, all involving unregulated cell growth. In cancer, cells divide and grow uncontrollably, forming malignant tumors, and invade nearby parts of the body. The cancer may also spread to more distant parts of the...
, anti-diabetes, cardiovascular and anti-infection drugs.
Reddy's international marketing successes were built on a strong manufacturing base which itself was a result of inorganic growth
Inorganic growth
Inorganic growth is the rate of growth of business, sales expansion etc. by increasing output and business reach by acquiring new businesses by way of mergers, acquisitions and take-overs. This kind of growth also takes place due to government directives, leading to enhancement of business in some...
through acquisition of international and national facilities. Reddy's merged Cheminor Drug Limited (CDL) with the primary aim of supplying active pharmaceutical ingredients to the technically demanding markets of North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
and Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
. This merger also gave Reddy's an entry into the value-added generics business in the regulated markets of APIs.
Expansion and acquisition
By 1997, Reddy's was ready for the next major step. From being an API and bulk drug supplier to regulated markets like the USA and the UK, and a branded formulations supplier in unregulated markets like India and Russia, Reddy's made the transition into generics by filing an Abbreviated New Drug Application (ANDA) in the USA. The same year, Reddy's out-licensed a molecule for clinical trialClinical trial
Clinical trials are a set of procedures in medical research and drug development that are conducted to allow safety and efficacy data to be collected for health interventions...
s to Novo Nordisk
Novo Nordisk
Novo Nordisk manufactures and markets pharmaceutical products and services. Created in 1989 through a merger of two Danish companies dating back to the 1920s, it has become one of the world's leading companies in diabetes care, where Novo Nordisk pursues research into pulmonary delivery systems;...
, a Danish
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
pharmaceutical company.
It strengthened its Indian manufacturing operations by acquiring American Remedies Ltd. in 1999. This acquisition made Reddy’s the third largest pharmaceutical company in India, after Ranbaxy and Glaxo (I) Ltd., with a full spectrum of pharmaceutical products, which included bulk drugs, intermediates, finished dosages, chemical synthesis, diagnostics and biotechnology.
Reddy’s started exploiting Para 4 filing as a strategy in bringing new drugs to the market at a faster pace. In 1999 it submitted a Para 4 application for Omeprazole
Omeprazole
Omeprazole is a proton pump inhibitor used in the treatment of dyspepsia, peptic ulcer disease , gastroesophageal reflux disease , laryngopharyngeal reflux and Zollinger–Ellison syndrome...
, the drug that had been the cornerstone of its success in India. In December 2000, Reddy’s had undertaken its first commercial launch of a generic product in the USA., and its first product with market exclusivity was launched there in August 2001. The same year, it also became the first non-Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
ese pharmaceutical company from the Asia-Pacific
Asia-Pacific
Asia-Pacific or Asia Pacific is the part of the world in or near the Western Pacific Ocean...
region to obtain a New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
listing, ground-breaking achievements for the Indian pharmaceutical industry.
In 2001 when Reddy’s became the first Indian company to launch the generic drug, fluoxetine
Fluoxetine
Fluoxetine is an antidepressant of the selective serotonin reuptake inhibitor class. It is manufactured and marketed by Eli Lilly and Company...
(a generic version of Eli Lilly and Company
Eli Lilly and Company
Eli Lilly and Company is a global pharmaceutical company. Eli Lilly's global headquarters is located in Indianapolis, Indiana, in the United States...
’s Prozac) with 180 day market exclusivity in the USA. Prozac had sales in excess of $1 billion per year in the late nineties. Barr Laboratories of the U.S. obtained exclusivity for all of the approved dosage forms (10 mg, 20 mg) except one (40 mg), which was obtained by Reddy’s. Lilly had numerous other patents surrounding the drug compound and had already enjoyed a long period of patent protection. The case to allow genertic sales was heard twice by the Federal Circuit Court
United States Court of Appeals for the Federal Circuit
-Vacancies and pending nominations:-List of former judges:-Chief judges:Notwithstanding the foregoing, when the court was initially created, Congress had to resolve which chief judge of the predecessor courts would become the first chief judge...
, and Reddy’s won both hearings. Reddy’s generated nearly $70 million in revenue during the initial six-month exclusivity period. With such high returns at stake, Reddy’s was gambling on the success of the litigation; failure to win the case could have cost them millions of dollars, depending on the length of the trial.
The fluoxetine marketing success was followed by the American launch of Reddy's house-branded ibuprofen
Ibuprofen
Ibuprofen is a nonsteroidal anti-inflammatory drug used for relief of symptoms of arthritis, fever, as an analgesic , especially where there is an inflammatory component, and dysmenorrhea....
tablets in 400, 600 and 800 mg sizes, in January 2003. Direct marketing
Direct marketing
Direct marketing is a channel-agnostic form of advertising that allows businesses and nonprofits to communicate straight to the customer, with advertising techniques such as mobile messaging, email, interactive consumer websites, online display ads, fliers, catalog distribution, promotional...
under the Reddy’s brand name represented a significant step in the company’s efforts to build a strong and sustainable US generic business. It was the first step in building Reddy’s fully-fledged distribution network in the US market.
American IPO and expansion into Europe
In 2001 Reddy’s completed its US initial public offeringInitial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
of $132.8 million, secured by American Depositary Receipt
American Depositary Receipt
An American depositary receipt is a negotiable security that represents the underlying securities of a non-U.S. company that trades in the US financial markets...
s. At that time the company also became listed on the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
. Funds raised from the initial public offering helped Reddy’s move into international production and take over technology-based companies.
In 2002, Reddy’s started its Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
an operations by acquiring two pharmaceutical firms in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
. The acquisition of BMS Laboratories and its wholly owned subsidiary, Meridian UK, allowed Reddy’s to expand geographically into the European market. In 2003 Reddy’s also invested $5.25 million (USD) in equity capital
Ownership equity
In accounting and finance, equity is the residual claim or interest of the most junior class of investors in assets, after all liabilities are paid. If liability exceeds assets, negative equity exists...
into Bio Sciences
Biotechnology
Biotechnology is a field of applied biology that involves the use of living organisms and bioprocesses in engineering, technology, medicine and other fields requiring bioproducts. Biotechnology also utilizes these products for manufacturing purpose...
Ltd.
Auriegene Discovery Technologies, a contract research company, was established as a fully owned subsidiary of Reddy’s in 2002. Auriegene's objective was to gain experience in drug discovery through contract research for other pharmaceutical companies. Reddy’s entered into a venture investment agreement with ICICI Bank
ICICI Bank
ICICI Bank Ltd. is India's second largest financial services company headquartered in Mumbai, India. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of...
, an established Indian banking company. Under the terms of the agreement, ICICI Venture agreed to fund the development, registration and legal costs related to the commercialization of ANDAs on a pre-determined basis. Upon commercialization of these products, Dr. Reddy's pays ICICI Venture royalty on net sales for a period of 5 years.
Global expansion
By the early 2000s2000s
File:2000s decade montage3.png|From left, clockwise: The World Trade Center towers, in the wake of the September 11 attacks; the Euro enters into European currency in 2002; a statue of Saddam Hussein being toppled during the Iraq War; U.S. troops heading toward an army helicopter during the War in...
, Reddy's had successfully grown into a fully integrated pharmaceutical company. It had been less than a decade since the beginning of its expansion in the mid-nineties. The company's growth so far had been founded on a targeted program of inorganic growth and investments in process R&D. It had chosen a "high risk-high gain" strategy for growth by going into direct competition
Competition
Competition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...
with existing patent holders. A major challenge for Reddy’s in the early 2000s was to find ways to de-risk its overall strategy. The company elected to expand globally, and went on a spree of acquisitions.
In March 2002, Dr. Reddy’s acquired BMS Laboratories, Beverley
Beverley
Beverley is a market town, civil parish and the county town of the East Riding of Yorkshire, England, located between the River Hull and the Westwood. The town is noted for Beverley Minster and architecturally-significant religious buildings along New Walk and other areas, as well as the Beverley...
, and its wholly owned subsidiary Meridian Healthcare, for 14.81 million Euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
s. These companies deal in oral solids, liquids and packaging, with manufacturing facilities in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
and Beverley
Beverley
Beverley is a market town, civil parish and the county town of the East Riding of Yorkshire, England, located between the River Hull and the Westwood. The town is noted for Beverley Minster and architecturally-significant religious buildings along New Walk and other areas, as well as the Beverley...
in the UK. Recently, Dr. Reddy’s entered into an R&D and commercialization agreement with Argenta Discovery Ltd., a private drug development company based in the UK, for the treatment of COPD.
With growing success in the generics market, Reddy’s also came to realize the need for developing marketing and distribution capabilities in the USA. Reddy’s was considering several options in 2003 for marketing their hypertension
Hypertension
Hypertension or high blood pressure is a cardiac chronic medical condition in which the systemic arterial blood pressure is elevated. What that means is that the heart is having to work harder than it should to pump the blood around the body. Blood pressure involves two measurements, systolic and...
product. The company already had one tie-up with Pharmaceutical Resources, Inc. to market Fluoxentine 40 mg tablets. It also had a tie-up with Par Pharmaceuticals Inc., to produce and market over-the-counter drug
Over-the-counter drug
Over-the-counter drugs are medicines that may be sold directly to a consumer without a prescription from a healthcare professional, as compared to prescription drugs, which may be sold only to consumers possessing a valid prescription...
s in the U.S. In addition to the United States, Reddy’s generics business had established a presence in the UK, which became a platform for expansion into other countries in Europe. Its API business had sales in over 60 countries, with the US and India being the most significant revenue contributors. The branded formulations business was active in over 30 countries and Reddy’s was a significant player in the Indian and Russian markets. The business planned to significantly increase its presence in China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
and Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
in the near future.
Dr. Reddy’s entered into a 10-year agreement with Rheoscience A/S of Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
for the joint development and commercialization of Balaglitazone (DRF-2593), a molecule for the treatment of type-2 diabetes. Rheoscience holds this product’s marketing rights for the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
and China, while the rights for the US and the rest of the world will be held by Dr. Reddy’s. Dr. Reddy’s conducted clinical trials of its cardiovascular drug RUS 3108 in Belfast
Belfast
Belfast is the capital of and largest city in Northern Ireland. By population, it is the 14th biggest city in the United Kingdom and second biggest on the island of Ireland . It is the seat of the devolved government and legislative Northern Ireland Assembly...
, Northern Ireland
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...
, in 2005. The trials were conducted to study the safety and the pharmacokinetic profiles of the drug, which is intended for the treatment of atherosclerosis, a major cause of cardiovascular disorders.
Dr. Reddy’s entered into a marketing agreement with Eurodrug Laboratories, a pharmaceutical company based in Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
, for improving its product portfolio for respiratory diseases. It introduced a second-generation xanthine bronchodilator, Doxofylline, which is used for the treatment of asthma
Asthma
Asthma is the common chronic inflammatory disease of the airways characterized by variable and recurring symptoms, reversible airflow obstruction, and bronchospasm. Symptoms include wheezing, coughing, chest tightness, and shortness of breath...
and chronic obstructive pulmonary disease (COPD) patients.
In 2004, Reddy’s acquired Trigenesis Therapeutics Inc; a US-based private dermatology company. This acquisition gave Reddy’s access to proprietary products and technologies in the dermatology
Dermatology
Dermatology is the branch of medicine dealing with the skin and its diseases, a unique specialty with both medical and surgical aspects. A dermatologist takes care of diseases, in the widest sense, and some cosmetic problems of the skin, scalp, hair, and nails....
sector.
Dr. Reddy’s Para 4 application strategy for generic business received a severe setback when Reddy’s lost the patent challenge in the case of Pfizer
Pfizer
Pfizer, Inc. is an American multinational pharmaceutical corporation. The company is based in New York City, New York with its research headquarters in Groton, Connecticut, United States...
’s drug Norvasc (amlodipine maleate), a drug indicated for the treatment of hypertension
Hypertension
Hypertension or high blood pressure is a cardiac chronic medical condition in which the systemic arterial blood pressure is elevated. What that means is that the heart is having to work harder than it should to pump the blood around the body. Blood pressure involves two measurements, systolic and...
and angina. The cost involved in patent litigation as well as the unexpected loss of the patent challenge affected Reddy’s plans to start speciality business in the US generic markets.
In March 2006, Dr. Reddy’s acquired Betapharm Arzneimittel GmbH from 3i
3i
3i Group plc is a multinational private equity and venture capital company headquartered in London, United Kingdom. It has offices in 13 countries across Asia, Europe and the Americas and had total assets under management of £12.7 billion as at 31 March 2011...
for 480 million Euros. This is one of the largest-ever foreign acquisitions by an Indian pharmaceutical company. Betapharm is Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
’s fourth-largest generics pharmaceuticals, with a 3.5% market share
Market share
Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...
, including 150 active pharmaceutical ingredients.
Reddy’s has promoted India’s first integrated drug development company Perlecan Pharma Pvt Ltd together with ICICI ventures capital fund management company Ltd and Citigroup
Citigroup
Citigroup Inc. or Citi is an American multinational financial services corporation headquartered in Manhattan, New York City, New York, United States. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate...
Venture Capital
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
International growth partnership Mauritius
Mauritius
Mauritius , officially the Republic of Mauritius is an island nation off the southeast coast of the African continent in the southwest Indian Ocean, about east of Madagascar...
Ltd. The combined entity will undertake clinical development and out-licensing of new chemical entity
New chemical entity
A new chemical entity , or new molecular entity , is, according to the U.S. Food and Drug Administration, a drug that contains no active moiety that has been approved by the FDA in any other application submitted under section 505 of the Federal Food, Drug, and Cosmetic Act.An active moiety is a...
assets.
Dr. Reddy's is presently licensed by Merck & Co.
Merck & Co.
Merck & Co., Inc. , also known as Merck Sharp & Dohme or MSD outside the United States and Canada, is one of the largest pharmaceutical companies in the world. The Merck headquarters is located in Whitehouse Station, New Jersey, an unincorporated area in Readington Township...
to sell an authorized generic version of the popular drug simvastatin
Simvastatin
Simvastatin is a hypolipidemic drug used to control elevated cholesterol, or hypercholesterolemia. Simvastatin is a member of the statin class of pharmaceuticals, is a synthetic derivate of a fermentation product of Aspergillus terreus.-Medical uses:The primary uses of simvastatin is for the...
(Zocor) in the USA. Since Dr. Reddy's has a license from Merck, it was not subject to the exclusivity period on generic simvastatin.
As of 2006, Dr. Reddy’s Labs crossed $500 million USD in revenues, flowing from their APIs, branded formulations and generics segments; the former two segments account for almost 75% of revenues. Dr. Reddy's deals in and manages all the processes, from the development of the API to the submission of finished dosage dossiers to the regulatory agencies.
Drug discovery problems
In September 2005, Dr. Reddy's spun off its drug discovery and research wing into a separate company called Perlecan Pharma Private Limited. At the time, this was hailed as an innovative move, but in 2008, the company it had to be wound down due to funding constraints. Dr. Reddy's was the first Indian pharma company to attempt such an effort to de-couple risk of drug discovery from the parent company by creating a separate company with external source of funding. Perlecan Pharma was partially funded by ICICI Venture Capital and Citigroup Venture International, both of which held a 43% stake in Perlecan for an estimated $22.5 million. However, the company was forced to buy back the Perlecan shares from ICICI and Citigroup due to doubts regarding the commercial viability of the drug candidates that were in Perlecan's pipeline. At that point, Perlecan became a wholly owned subsidiary. In the board meeting of October 23, 2008, the company chose to amalgamate/absorb Perlecan, thereby making it an in-house research facility, as it was before 2005.In 2009, the company did a U-turn and has handed over discovery research and related intellectual property to its Bangalore
Bangalore
Bengaluru , formerly called Bengaluru is the capital of the Indian state of Karnataka. Bangalore is nicknamed the Garden City and was once called a pensioner's paradise. Located on the Deccan Plateau in the south-eastern part of Karnataka, Bangalore is India's third most populous city and...
-based subsidiary, with the possibility of spinning it off as a different entity altogether. "The company may be hoping to find a strategic partner in the future to share the risks and research funding."
2011 recall
In June 2011, certain lots of Dr. Reddy's generic simvastatin tablets were recalled due to tablets having a "musty" or "moldy" smell.Diabetes drug in Phase III trial
The Phase III testing of the company's diabetes drug candidate, Balaglitazone, was delayed. Reportedly, the Danish research partner which was conducting the clinical trials was facing financial problems Rheoscience's parent company Nordic Bioscience is believed to have undertaken to provide funds to Rheoscience to continue the trials.In January 2010, Dr. Reddy's Laboratories announced that its first late-stage trial of the experimental diabetes drug Balaglitazone hit its primary endpoint for the reduction of blood glucose levels. Dr Reddy's claims the data "leaves the program on track to an eventual regulatory approval".
Key people
As of March 31, 2006 board members and senior executives included.- Dr. Kallam Anji Reddy, Founder & Chairman
- Mr. GV PrasadGV PrasadGV Prasad is the Vice Chairman and CEO of Dr. Reddy's Laboratories.-Early life and education:Prasad, the second child of Syamala and Harischandra Reddy, did his initial schooling at the Vidyaranya High School in Hyderabad, Andhra Pradesh, India. He later moved to his hometown, Nellore, where he...
- Vice chairman & chief executive - Mr. Satish Reddy - Managing director & COO
- Mr. B.Koteswar Rao - Independent director
- Mr. P N Devarajan - Independent director
- Mr. Ravi Bhoothalingam - Independent director
- Mr. Anupam Puri - Independent director
- Dr. Omkar Goswami - Independent director
- Dr. V. Mohan - Independent director
- Mr. Amit Patel - Vice President, Corporate Development & Strategic Planning
Top active pharmaceutical ingredients
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Naproxen Naproxen sodium is a nonsteroidal anti-inflammatory drug commonly used for the reduction of pain, fever, inflammation and stiffness caused by conditions such as:... Atorvastatin Atorvastatin , sold by Pfizer under the trade name Lipitor, is a member of the drug class known as statins, used for lowering blood cholesterol. It also stabilizes plaque and prevents strokes through anti-inflammatory and other mechanisms... Montelukast Montelukast is a leukotriene receptor antagonist used for the maintenance treatment of asthma and to relieve symptoms of seasonal allergies. It is usually administered orally... |
Sparfloxacin Sparfloxacin , trade names Zagam and Zagam Respipac, is a fluoroquinolone antibiotic used in the treatment of bacterial infections. It has a controversial safety profile... Nizatidine Nizatidine is a histamine H2-receptor antagonist that inhibits stomach acid production, and commonly used in the treatment of peptic ulcer disease and gastroesophageal reflux disease... Fexofenadine Fexofenadine is an antihistamine drug used in the treatment of hayfever and similar allergy symptoms... |
Clopidogrel Clopidogrel is an oral, thienopyridine class antiplatelet agent used to inhibit blood clots in coronary artery disease, peripheral vascular disease, and cerebrovascular disease. It is marketed by Bristol-Myers Squibb and Sanofi-Aventis under the trade name Plavix. The drug works by irreversibly... (Not in US due to 2007 patent case) Omeprazole Omeprazole is a proton pump inhibitor used in the treatment of dyspepsia, peptic ulcer disease , gastroesophageal reflux disease , laryngopharyngeal reflux and Zollinger–Ellison syndrome... Finasteride Finasteride is a synthetic antiandrogen that inhibits type II 5-alpha reductase, the enzyme that converts testosterone to dihydrotestosterone... Sumatriptan Sumatriptan is a triptan sulfa drug containing a sulfonamide group. It is used for the treatment of migraine headaches. Sumatriptan is produced and marketed by various drug manufacturers with many different trade names such as Sumatriptan, Imitrex, Imigran, Imigran recovery.-Approval and... |
Top ten brands in India
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