India’s Dr Reddy’s tops Q2 profit view on strong US demand

By Rishika Sadam

HYDERABAD/BENGALURU (Reuters) -India’s Dr Reddy’s Laboratories reported a bigger-than-expected rise in second-quarter profit on Friday, boosted by strong U.S. sales of its generic version of popular cancer drug Revlimid.

Its consolidated net profit after tax jumped 33% to 14.82 billion rupees ($178 million) in the quarter ended Sept. 30, compared with analysts’ average estimate of 12.69 billion rupees, according to LSEG data.

Revenue rose 9% to 69.03 billion rupees, led by a jump in the key global generics segment. North America business, Dr Reddy’s largest contributor, grew 13%, while sales in India and Europe rose 3% and 26%, respectively.

“We expect the U.S. run rate to continue given the generic Revlimid sales. But there seems to be nothing new in the pipeline in the coming quarters,” said Vishal Manchanda, analyst at Systematix.

Dr Reddy’s said it was in the process of conducting a bioequivalence study of Semaglutide, an active ingredient in popular weight-loss drugs such as Danish drugmaker Novo Nordisk’s Wegovy.

A bioequivalence study compares a generic test formulation with the original refernce drug.

“We’re ready with the design. And we can obviously take the product as and when the patent situation would allow,” said MV Ramana, CEO of branded markets (India and Emerging Markets) at Dr Reddy’s.

Dr Reddy’s Laboratories Inc, a U.S. subsidiary of Dr Reddy’s, was named as a defendant in a U.S. district court and faces allegations of improperly restraining competition and maintaining a shared monopoly in the sale of generic Revlimid.

Hyderabad-based Dr Reddy’s, which also makes complex biosimilars and active pharmaceutical ingredients, launched the generic version of Bristol Myers Squibb’s Revlimid last year.

Earlier on Friday, rival Cipla reported a bigger-than-expected rise in second-quarter profit.

Shares of Dr Reddy’s settled down 0.5% at 5,397.30 rupees after results.

They rose 8.3% during the September quarter, compared with a 12% climb in the Nifty Pharma index. ($1 = 83.2300 Indian rupees)

(Reporting by Rishika Sadam and Kashish Tandon; Editing by Savio D’Souza, Mrigank Dhaniwala and Shinjini Ganguli)