Dr Reddy’s raises its R&D spending

Published: 14-Jul-2015

Biosimilars account for around 15–20% of the overall R&D spend, representing US$45–60m

Dr Reddy’s Labs is continuing to increase its investment in R&D, which rose by 41% in the 2015 financial year to reach 11.7% of sales. Of this, generics accounted for 60% of the spend and proprietary products for 40%, up from just 15% six years ago.

Biosimilars account for around 15–20% of the overall R&D spend, representing US$45–60m. In an update to analysts the company said it expected R&D expenditure to remain high in 2016 at around 12% of sales.

Dr Reddy’s Labs currently has 18 active products in its proprietary products pipeline with two assets in Phase III and three New Drug Applications (NDAs) submitted in the US.

In 2015 Dr Reddy’s filed 13 ANDAs (abbreviated new drug applications) in the US, including eight Para IVs. In the US, the company has in-licensed three ANDAs of which two are Para IV filings. Cumulatively, the firm has five in-licensed ANDAs, of which four are pending approval. The company has said there would be four or five significant product launches in 2016.

Injectables has been a major growth driver for the company. The global generics business recorded sales growth of 14.6% year-on-year in 2015, affected by customer consolidation in the US. It expects its injectable portfolio to continue to provide strong traction, led by Caduet, Imitrex and Rapamune, in 2016.

The company has moved up the value chain from oral solid dosages to complex generics such as injectables, derma and extended release products. It has an established process in microsphere and liposomal technologies. Of the 68 pending approvals, 51% are complex generics. The company is currently working with 25 plus partners on at least 12 dosage forms in the pipeline, addressing markets worth around $10bn.

The company has four biosimilars commercialised in emerging markets, with two INDs filed with the US FDA. Two molecules are in clinical trials (Rituximab and Pegfilgrastim) along with four others at various levels, and have a market size of $25bn. By 2020, the management expects biologics to contribute estimated revenues of around $150–200m in emerging markets.

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