Dr Reddy’s introduced 8 new brands in Q1FY20 in India: Saumen Chakraborty, CFO

Dr Reddy’s have introduced eight new brands in the Indian market in the first quarter of fiscal 2020, says Saumen Chakraborty, Chief Financial Officer, Dr Reddy's Laboratories. During a chat with Dimpy Kalara, Zee Business, Chakraborty said, “issues that we faced on the delivery end led to a weakness in the API segment of the company. Edited Excerpts: 

Dr Reddy’s has posted good quarterly numbers and has strengthened its presence in Europe and India. What is the equation behind the success?
Eight new brands were introduced in India in this quarter. Our company has shifted its focus towards the Indian domestic market in the last few years and its results are visible and have helped in improving our rank. We are also trying to improve our performance in each division and its results are visible. Besides, the introduction of a few new products in Europe, which has resulted in some improvement there. But the company’s base is very low in Europe and such growth in the region will not have any major impact on the company. However, we will be focused on the growth in Europe as well.

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The Active Pharmaceutical Ingredient (API) segment is significant for the pharmaceutical sector which assists in the manufacturing of medicines. Certain weakness has been observed in the segment. How are you reading it and what can be the cause of the decline in demand?
The demand has not reduced, and our order books are healthy. We faced an issue of the delivery of our products as we had certain quality problems in a few of our plants. The issues have been resolved but we were not able to deliver it to the customers and that is why we suffered some losses in API’s external business. 

How many approvals were achieved by the end of this June quarter and how many ANDAs are available? How many renewals have been made?
The ANDA stands at 104 while the NDA stands at 3, which totals to 107 pending approvals in the US, and there are several WIPs for the registration in other countries. 

Update us on the sales of a drug named, Suboxone, which is used in the treatment of cancer, in the June quarter and how will it grow in the US market in the upcoming quarters?
Competition hasn’t had any major impact on Suboxone, and its pricing is good, yet. But the brand sale hasn’t achieved generalisation to the amount that it should have done, however, more generalisation in time to come will have an impact on the company and it will benefit us. 

What are your strategies for the future and where will the company focus upon?
The commercial part of the proprietary products business under which we sales sports was kept in the US, which includes derma and neuro. We didn’t have many products except for one, and it is not possible to recover the total cost of sales products. So, we will focus more on the R&D of the proprietor products and that is why the commercial part of the business has been divested with the existing brand. But in the proprietor products, we will continue focusing on the development of the existing molecule and R&D on new molecules. Apart from the proprietary products, we have had a focus on emerging markets and our products corresponding to Oncology and hospital tender business is improving in other countries as well. 

Update us on the USFDA notices to your plant in Srikakulam. Have you answered the notices and what is the existing status of the same?
We expect that the USFDA will re-audit the Srikakulam plant and we are waiting for it. The plant should be audited in the next few months.