DRL expects new products to boost growth; API biz a concern
Shares of Dr Reddy's Laboratories (DRL) plunged over 10 percent on Tuesday, July 27, in the worst sell-off in five years after weak quarterly earnings and a subpoena from the US drug regulator Securities and Exchange Commission (SEC) for production of documents concerning Commonwealth of Independent States (CIS) geographies. Erez Israeli, Chief Executive Officer of Dr Reddy's Laboratories, discussed this further.
Shares of Dr Reddy's Laboratories (DRL) plunged over 10 percent on Tuesday, July 27, in the worst sell-off in five years after weak quarterly earnings and a subpoena from the US drug regulator Securities and Exchange Commission (SEC) for production of documents concerning Commonwealth of Independent States (CIS) geographies. Erez Israeli, Chief Executive Officer of Dr Reddy's Laboratories, discussed this further.
“This is about a recent block of land that was received, we disclosed it in November of last year. We have, as per the process, to disclose it to the relevant authorities in the US. At this stage, it is under investigation and I don’t see any immediate action related to that, it is very much an integral part of that process,” he said.
The company has not made any provisions with regard to subpoena. “We need to see the nature of this as far as the investigation is concerned and then whatever will be the outcome of this investigation, we will submit accordingly. There is no provision,” he shared.
In terms of earnings, he mentioned, “This has been an unusual quarter in many aspects. Business is growing in all the areas. The only business that did not go well is the API business. The business is in the right direction. What led to results specifically for this quarter is the fact that we experienced certain price erosions on some key products in the US.”
The company sees price pressure when there is competition. “You normally face price pressure as competitors want to take your market share and we as a company can decide whether to defend that market share and that is what happened to us in this quarter for a couple of products. This is very normal,” he said.
“We will grow and you are going to see the impact of new products that we launched and will be launching in the coming quarters,” he shared.
On India business, he further mentioned, “We are awaiting more quantities of the second formulation of Sputnik. We have got a few million doses of first, waiting for the second.”
The full commercial launch of Sputnik very much depends on the ability of the supply. “They have their own challenges and COVID situation in the country,” he stated.
He believes Sputnik Light is a very interesting opportunity. “Sputnik Light is the first dose of Sputnik V and this is a very interesting opportunity. The scale up is happening between August and October,” he said.
For the full interview, watch the accompanying video.
(Edited by : Dipika Ghosh)
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