Dr Reddy’s yen for growth: Indian generics and API firm plans to partner in Japan

17-May-2015 - Last updated on 18-May-2015 at 10:40 GMT

Abhijit Mukherjee, Dr. Reddy’s COO eyeing Japanese generics marlket

Dr Reddy’s has set out to build in the Japanese market days after revealing that higher generic and API sales elsewhere had been pegged back by currency fluctuations.

Abhijit Mukherjee, Dr. Reddy’s COO, outlined its plan this week, telling in –Pharmatechnologist.com ongoing Government efforts to increase the number of non-branded medicines used in the country would make it an important market.

“The Japanese generics segment is slated to grow at 8– 10% between 2015- 2019 with generic penetration targeted to touch 60% in the next few years” the firm said, adding that “the Japanese market is an important growth driver for Dr. Reddy’s.“

“Dr. Reddy's intends to create a value accretive, highly profitable business in Japan through a portfolio of complex generics, biosimilar and specialty products, which will be brought to market in collaboration with Japanese partners.”

The approach matches the strategy by a group representing Indian drugmakers and ingredients suppliers at a tradeshow in Tokyo last month.

Yen for stability

Generating more revenue in Japan could also help Dr. Reddy’s lessen the negative impact currency fluctuations elsewhere have had on its business as the value of the Japanese yen has been relatively stable so far in 2015.

This contrasts with Russia’s rouble and Venezuela’s bolivar, fluctuations in the value of which saw Dr. Reddy’s fall short of analysts’ fourth quarter profit estimates for the financial year 2015.

According to a report published by the firm last week, net profit for the fiscal fourth quarter ended March 31 was INR5.18bn ($81.4m) up 7.7% on the year earlier period but short of the INR5.9bn expected by analysts survey by Bloomberg.

Currency fluctuations aside, Dr. Reddy’s is confident its generic and API business will grow in fiscal 2016.

Mukherjee told us “business growth was primarily driven by generic launches of our oncology APIs in mature markets and our portfolio of complex APIs in emerging markets” citing South East Asia, the Middle East, Mexico, Latin America as important.