Dr Reddy's posts 88 pc jump in Q3 net profit to Rs 513 crore

Pharma major Dr Reddy's Laboratories today reported a whopping 88 per cent growth in consolidated net profit to Rs 513 crore for the quarter ended December 31, 2011, on the back of robust Olanzapine sales in the USA.

The company had posted a net profit of Rs 273.14 crore for the third quarter of the previous fiscal.

The Hyderabad-based firm's net income from sales and services rose to Rs 2,769 crore in the third quarter ended December 31, 2011, from Rs 1,899 crore in the same period last fiscal, translating into 46 per cent growth, said DRL Managing Director and COO K Satish Reddy.

"It has been one of the best quarters we have ever had, both in terms of sales as well as profits. It is because of the exclusivity we had on the drug Olanzapine 20 mg, which we launched in October last year in the US market," Reddy told reporters in a press conference.

He said revenues from the North American market grew by 120 per cent to Rs 1,283 crore from Rs 582 crore in the same quarter last fiscal, with Olanzapine contributing USD 99 million to overall North American revenues.

Reddy said the USA growth story may continue in this quarter and next quarter as well, as the exclusivity of Olanzapine will continue.

"At least for the next six months, important launches are coming up and this will continue to drive the growth for the USA market. This quarter also has the benefit of Olanzapine exclusivity. With several good new launches, USA is looking like a good story," Reddy hoped.

Olanzapine is used to treat psychotic conditions such as schizophrenia and bipolar disorder. Annual sales of  Eli Lilly's Zyprexa (Olanzapine) amount to around USD 3.2 billion in the US, based on IMS sales data.

According to Reddy, the strong volume growth in North America was supported by key products such as Lansoprazole, Tacrolimus, Omeprazole Mg OTC and products from its Shreveport facility in USA, besides the launch of Fondaparinux and expansion of its antibiotics portfolio.

Revenues from Russia and India witnessed a growth of 15 and 16 per cent, respectively, to Rs 332 crore and Rs 419 crore in the third quarter of FY'12.

India sales growth was driven by new product launches such as Stamlo, Reditux, Omez-D and Razo.

Revenues from Europe grew by 6 per cent to Rs 433 crore in the quarter under review and for the first time, revenues from Germany did not witness a decline, which was due to new product launches out of tender, which offset price decline in the tendering process, Reddy informed.

Revenues from Germany stood at Rs 150 crore in the quarter, as against Rs 140 crore in Q3, FY'12.

Germany-based Betapharm, which was acquired by the country's second largest drug maker, was denting the company’s financials ever since it was taken over in 2006 with dwindling revenues.

Revenues from emerging markets stood at Rs 303 crore in the third quarter, up 17 per cent over the same period last fiscal.

The company made a capital expenditure of Rs 500 crore in the first nine months of the current fiscal, Reddy said.