Dr. Reddy's second-quarter profit more than doubles on one-off gains

Headline results for the second quarter:

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"I am pleased with our performance across the businesses and strong cash generation during the quarter," remarked co-chairman GV Prasad.

Dr. Reddy's Laboratories noted that profit in the quarter was boosted by a net tax benefit of INR 3.3 billion ($47 million), as well as a payment of INR 3.5 billion ($49 million) from Celgene related to a settlement agreement regarding generic versions of Revlimid (lenalidomide) in Canada.

Other results:

• Global generics revenue: INR 32.8 billion ($463 million), up 7%
  
  • North American generics revenue: INR 14.3 billion ($202 million), flat versus prior year, hit by price erosion and the voluntary recall of ranitidine in the US
  • Generics sales in emerging markets: INR 8.3 billion ($117 million), up 10%, with growth of 8% in Russia and 16% in other CIS countries and Romania
  • Generics sales in India: INR 7.5 billion ($106 million), up 9%, driven by new products and volume traction in base business
  • European generics revenue: INR 2.8 billion ($40 million), up 44%, boosted by new products and volume traction
• Sales from Pharmaceutical Services and Active Ingredients: INR 7.1 billion ($100 million), up 18%
• Propriety products: INR 8.1 billion ($114 million), up 472%, buoyed by a INR 7.2 billion ($102 million) licence fee from Upsher-Smith Laboratories for rights to Zembrace Symtouch and Tosymra

What analysts said:

Kunal Dhamesha of SBICAP Securities suggested that after adjusting for the one-off gains in the quarter, "the result is in line with street expectations." Dhamesha added that although Dr. Reddy's also benefited from the Upsher-Smith payment, the company "has six-seven products in their pipeline, so we can expect at least one deal per year of a similar magnitude."

To read more Top Story articles, click here.