Oct 23 (Reuters) – Indian drugmaker Dr Reddy’s Laboratories reported a better-than-expected quarterly profit on Friday, as domestic demand helped cushion the slowdown in its key US market.
Consolidated net profit after tax fell to 9.25 billion rupees ($97.43 million) in the quarter ended September 30, from 13.47 billion rupees a year ago. Analysts, on average, had estimated a profit of 7.49 billion rupees, according to data compiled by LSEG.
The company took a 710 million rupee revenue hit from a recall of semaglutide in Canada, adding to the 2.4 billion rupees in provisions it made in the previous quarter over quality issues with the drug.
Dr Reddy’s, which is counting on semaglutide as a major growth driver in India and a few global markets, said in July that supplies of its generic version would remain unavailable in India and face disruptions in Canada until at least late October after an impurity issue in the active ingredient forced it to halt production of new batches.
Revenue from operations fell 1.6% to 86.98 billion rupees, hit by pricing pressure and increasing competition in its key US market. Revenue from North America business fell about 23% to 24.89 billion rupees.
Dr Reddy’s has been grappling with declining sales of Lenalidomide, its generic version of Bristol Myers Squibb’s blockbuster cancer drug Revlimid, as more rivals enter the market after the drug lost exclusivity. Ongoing pricing pressure in generics is also adding to the slowdown.
The Indian market remained a bright spot with revenue boosted by demand for chronic therapy drugs, while the company expanded into women’s health with the acquisition of hormone replacement therapy brands.
Revenue from the India business rose 17.2% to 18.5 billion rupees.
Shares of the company closed marginally lower on Friday. They have dropped 3.3% so far this year, compared with the pharma index’s 12% climb.
($1 = 94.9400 Indian rupees)
(Reporting by Kashish Tandon, Rishika Sadam and Surbhi Misra; Editing by Shilpi Majumdar and Mrigank Dhaniwala)
