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R&D acquistions beckon Dr.Reddy's

Mar 24, 2000

Dr. Reddy’s Laboratories has finalised its American Depository Share issue size at $ 200 m. The issue is slated to be done within six months. DRL is one of the fastest growing companies in the pharmaceutical sector having a 1.4% market share in domestic formulations. The company has grown from being a bulk drug company to a respected formulation based company. It has products such as omeprazole (gastro–intestinal), ciprolet (anti–infective) Nise (pain and fever), Enam (cardiovascular) etc.

It is quite possible that the company may have plans to integrate Cheminor with itself before it goes in for an ADR listing. This could enable it to get a better price. The management has already announced that Cheminor will be eventually merged with DRL.

The company can even use the proceeds of the issue to takeover companies now that the pharmaceutical companies have been given permission to acquire companies overseas upto 10 times their export earnings. (DRL had exports of Rs 1184 m in FY 99).

Besides, DRL has three new original molecules in its research pipeline. One is an anti–cancer compound, another was a Cox II inhibitor (anti–pain) and third was a compound indicated for metabolic disorders. The company foresees licensing out two of these to MNCs for clinical trials in the near future.

Its sister concern Cheminor has filed six abbreviated new drug applications (ANDAs) in the US, four in the European Union apart from another six, which are in the pipeline. The company has set a target to file three to five ANDAs every year and have already received approval for ranitidine (75 mg), the anti–ulcerant omeprazole and anti–depressant fluoxetine.


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