Dr. Reddy's Laboratories reported revenues exceeding $1 billion for the first time during the first nine months of fiscal 2007 (ended Dec. 31).

The generic drug maker generated revenues of Rs 49.5 billion ($1.1 billion), during the period, the company announced Jan. 22.

"Two acquisitions and outside opportunities helped, but it is important to note that underlying these upsides is a strong and profitable growth engine in our core businesses," CEO GV Prasad said during a Q3 financial call.

The Hyderabad, India company has evolved from an active pharmaceutical ingredients manufacturer for the Indian market into "a vertically integrated global pharmaceutical company with activities spanning the entire pharmaceutical value chain," Prasad said.

Third quarter revenues were up more than 160 percent year over year to Rs 15.4 billion ($348 million).

In North America, revenues increased to Rs 4.6 billion ($105 million) for the quarter, up from Rs 480 million ($10.9 million) in the year ago period. Prasad attributed the growth in part to combined revenues from generic simvastatin ( Zocor) and finasteride ( Proscar ), which generated approximately Rs 3.4 billion ($76.6 million).

Dr. Reddy's manufactures authorized generics of Merck's cholesterol drug Zocor and its benign prostatic hyperplasia drug Proscar (¹ Also see "If You Can't Beat Em'…Merck Signs Authorized Generic Deal For Zocor And Proscar" - Pink Sheet, 31 January, 2006.).

The company launched fexofenadine, a generic version of Sanofi-Aventis' Allegra , at risk shortly after FDA approved its abbreviated new drug application in April. During the call, Prasad recalled the at-risk launch as an opportunity for the company to "participate in a meaningful manner in one of the largest opportunities in the U.S. generic industry."

Fexofenadine has been "a significant contributor to overall revenues in the U.S.," he said. The drug generated Rs 479 million ($10.9 million) in the third quarter

Generic ondansetron (GlaxoSmithKline's Zofran ), for which Dr. Reddy's gained FDA approval Dec. 26, contributed about Rs 223 million ($5 million) to the quarter's revenue in a few short days, Prasad said.

Dr. Reddy's has 180-day exclusivity on the 4 mg, 8 mg, 16 mg and 24 mg strengths of the antiemetic (² Also see "Par Launches Generic Zofran ODT Following FDA Clearance" - Pink Sheet, 28 December, 2006.).

The firm's acquisition of the German generic company Betapharm also contributed to the top line, Prasad said, calling the March acquisition "the first step toward building a strong presence in Europe over the next few years" (³ Also see "Generic Giant: Dr. Reddy’s Acquires Betapharm Group" - Pink Sheet, 6 March, 2006.). Betapharm contributed Rs. 2.67 billion ($60 million) to the top line in Q3

Prasad said Dr. Reddy's has a "large number" of biosimilar products in development but that "the patent landscape, regulatory pathways, the basis of approval and marketing" are hurdles that will need to be overcome before they can be launched.

"We certainly are working in the direction, but we don't have a timeframe or clarity on when and how," he added.

Prasad said Dr. Reddy's will continue to make significant investments in both its generics business and its "businesses of specialty, biologics and drug discovery," which he said will lead the firm "to transition into a discovery-led global pharmaceutical company."

The thoughts are similar to those expressed by Ranbaxy Laboratories VP Global Strategy and Development Shyam Bishen in an interview with "The Pink Sheet" DAILY. He said that while generics are still a primary revenue driver, Indian drug companies have become focused on developing their own drugs (⁴ Also see "Indian Pharma Focusing On R&D, Licensing – Ranbaxy Exec" - Pink Sheet, 22 November, 2006.).

- Shirley Haley (s.haley@elsevier.com)

Dr. Reddy’s Tops Billion Dollar Mark In First Nine Months Of Fiscal 2007

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