2014 Generics Sales: $1.8 billion +10%
Worldwide Market Share: 2.4%
Right off the bat, the philosophy of Dr. Reddy's Labs ($RDY) has been to bring new molecules into the country at an affordable price. And the company has stayed true to the goal, with generics revenue making up 81% of net revenues for the whole company.
And despite FDA crackdowns on manufacturing facilities in India, the company comes in at No. 11, having increased its generics sales by $200 million between 2013 and 2014. The 10% increase was driven largely by sales in North America, India and emerging markets, specifically Venezuela.
In FY 2015, which ended March 31, North American generics sales brought in just over $1 billion, an increase of 17% over the previous year. A large driver of success, the company says, is consolidating and sustaining the market position of key injectables launched the previous financial year. Dr. Reddy's attributes its success in North America to market share gains in azacitidine (generic Vidaza), decitabine (generic Dacogen) and atorvastatin (generic Lipitor). Sales of the first two each exceeded $100 million for the year.
The company also launched 12 new products in the U.S., including valganciclovir and sirolimus, and made 13 new ANDA filings, bringing its total to 68 ANDAs awaiting FDA approval.
It also caught a break late in the year when manufacturing problems at Indian competitor Ranbaxy Laboratories, now part of Sun Pharmaceutical, led the FDA to pull Ranbaxy's exclusive for Roche's ($RHHBY) Valcyte, a drug that had earned Roche about $800 million in 2013. Dr. Reddy's, along with Endo ($ENDP), were tagged to make generic versions instead.
Generics sales grew 14% in India and 13% in emerging markets, despite some problems including the decline of the Russian ruble. In India, top performers included Resof (sofosbuvir, or generic Sovaldi), Melgain, Deflux and Acrofy, among others.
And while the unique selling point of generics is their lower price point, Dr. Reddy's offers up one explanation for its success: generics price inflation. FDA restrictions on certain generics plants have limited the supply of certain generics, driving up the price. And to stay one of those companies that supplies product to the U.S., Dr. Reddy's made moves to reduce human error at its Bachupally plant in 2014 by cutting its workers by 20%.
However, even these precautions weren't enough, and Dr. Reddy's was hit with an FDA Form 483 at the end of 2014 for a plant in Andhra Pradesh.
As for the future, Dr. Reddy's is eyeing injectables. Currently, its injectables unit is a "critical component," accounting for more than one-quarter of its North American generics business. However, with billions of dollars' worth of injectable product patents set to expire within the next four years, there is ample room to grow.
-- Amirah Al Idrus (email | Twitter)
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