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One-time settlement from Celgene boosts Dr Reddy’s Q1 profit by 45 per cent

DRL had entered into a confidential settlement agreement with Celgene for its abbreviated new drug submissions for a generic version of Revlimid capsules.

Published: 30th July 2019 08:00 AM  |   Last Updated: 30th July 2019 08:00 AM   |  A+A-

By Express News Service

HYDERABAD: Dr Reddy’s Laboratories (DRL) announced 45 per cent surge in net profit to Rs 663 crore for the quarter ended June 2019, against Rs 456 crore a year before, despite revenue inching up a mere 3 per cent to Rs 3,844 crore. The rise in profit was led by a one-time receipt of Rs 346 crore from the US-based biotechnology firm Celgene, towards settlement for a generics drug.

DRL had entered into a confidential settlement agreement with Celgene for its abbreviated new drug submissions for a generic version of Revlimid capsules, used for treatment of multiple myeloma (cancer), pending approval before Health Canada. It has now received Rs 346 crore from Celgene, bumping up profits.

According to Saumen Chakraborty, president, CFO and global HR head of DRL, the company has seen significant free cash flows during FY19 to the tune of Rs 2,100 crore and it has enough financial muscle to pursue inorganic growth.  “Our debt-to-equity ratio is 0.04 per cent. We are at any point of time looking at opportunities in the market place where there is a synergy, a good strategic player,” he said.

Meanwhile, revenue from the Global Generics segment stood at Rs 3,300 crore, up by 8 per cent, led by new products and volume traction, but partly offset by price erosion and forex movement. While revenue from the Indian market remained robust at 15 per cent, the same from emerging markets were in lockstep, clocking 10 per cent growth, mainly aided by new product launches and increasing volumes.

Cumulatively, DRL has filed 107 generic filings pending approval from the US FDA. Going forward, focus will remain on building complex generics, bio-similars and differentiated products pipeline.

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