Dr. Reddy’s Laboratories back in black

HYDERABAD: The NYSE-listed pharmaceutical major Dr. Reddy’s Laboratories has announced a Rs. 192.40-crore net profit during the third quarter ended December 31, 2008, largely driven by the launch of Sumatriptan in late November 2008. The company posted losses of Rs. 121.30 crore in the corresponding quarter in the previous fiscal.

Sumatriptan is an authorised generic version of GlaxoSmithKline’s Imitrex (generic version: sumatriptan succinate). Imitrex is prescribed for the treatment of migraine attack.

The revenue growth was put at 49 per cent at Rs. 1,840 crore now against Rs. 1,231 crore in the third quarter of 2007-08. However, if the revenues from Sumatriptan are excluded, the year-on-year growth is pegged at 21 per cent.

Krishna G. Palepu, a Harvard Business School professor who served on the board of Satyam Computer Services until the controversy broke out, resigned as a non-executive director of Dr. Reddy’s Lab on Tuesday.

Dr. Reddy’s, which bought 185 acres from SIFY, an erstwhile arm of Satyam Computer, received notices from the State revenue authorities contending that 134 acres of it was assigned land. It is, however, confident of retaining it, according to G. V. Prasad, Vice-Chairman and CEO.

Giving financial results at a press conference here, K. Satish Reddy, Managing Director and COO, said in spite of devaluation of the rouble and economic slowdown impacting the company’s financial performance, revenue growth in Russia was 44 per cent. Business in Germany was on a slippery note, despite the company winning tender for eight products/33 contracts from AOK health insurance funds. However, it was involved in a legal wrangle for which hearing was slated for Thursday and the result would come in four weeks.

Withdrawal of Olanzapine stocks from the market due to the company losing a case in German federal court impacted the revenues. The growth in the European markets dropped by two per cent while in India it was almost flat. The company changed the supply-chain management strategy to overcome shortage and supply of medicines.

To a query on where the company parked its funds, new CFO Uman Vohra said it was deposited in some large public sector banks and two top multinational banks. He also said that the company continued to be vigilant on the accounts due to specific issues. The CFO changed at least every three years.

Mr. Prasad quipped: “There is no fixed coterie in the company”. KPMG is the auditing firm for Dr. Reddy’s.