DR. REDDY’S Q4FY24 RESULTS: CONSUMER HEALTH SEGMENT TO DRIVE GROWTH OF INDIA BUSINESS; TO FOCUS ON M&A OPPORTUNITIES IN FY25
Dr. Reddy’s Laboratories Ltd. on Tuesday announced its consolidated financial results for the fourth quarter and full year ended March 31, 2024. According to the company’s statement, the pharma major recorded a net profit of Rs 1,307 crore in the last quarter of the financial year 2023-24, compared to Rs 959.2 crore it reported in Q4 of FY23, an increase of 36.3 percent on year.
Dr. Reddy’s revenue grew to Rs 7,083 crore in Q4 of FY24, a growth of 12.5% on year, compared to Rs 6,296.8 crore it posted in the same period last year.
During a press briefing on Tuesday, G V Prasad, Co-Chairman & MD, Dr. Reddy’s Laboratories said that growth and profitability in FY2024 has been driven by the company’s performance in the US.
“We have also made significant progress on future growth drivers through licensing, collaboration and pipeline building. We will continue to strengthen our core businesses through superior execution as we invest and build the future growth drivers,” he said.
During Q4FY24, the company entered into an exclusive partnership with Sanofi to promote and distribute its vaccine brands in India. It also partnered with Bayer to distribute the second brand for heart failure management drug, Vericiguat, in India.
During the quarter the entered into a licensing agreement with U.S.-based biopharma, Pharmazz, to market first-in-class Centhaquine (Lyfaquin) for treatment of hypovolemic shock in India. During this period, it also acquired MenoLabs business, a women’s health, and dietary supplement branded portfolio from Amyris, Inc.
In the India market, the company reported Q4FY24 revenues at ₹ 11.3 billion, YoY decline of 12% and QoQ decline of 5%. Adjusted for brand divestment income, on a re-based comparator, YoY growth of 11%. QoQ decline is on account of lower volumes from base business.
As per IQVIA, the IPM rank was at 10 for the quarter. FY24 revenues at ₹ 46.4 billion, YoY decline of 5%. Excluding the income from divestment of non-core brands in the previous year, on a re-based comparator, India growth is in mid-single digit.
“…the revenue decline is because last year the same quarter we had divestment income but without that we have grown double-digit…we feel good about how this business is shaping up. So, for India we want to focus on how we grow the existing base business…grow the brands that have good acceptance in the market. But again in the therapeutic areas where we have a strong presence…how do we bring in innovative assets to address the unmet needs you have seen a couple of deals go in that direction…we have already launched some products and we have a few coming up in the later part of the year,” M. V. Ramana, CEO, Branded Markets (India & Emerging Markets), Dr. Reddy’s Laboratories told Financial Express.com.
He also said multiple aspects like Consumer Health, recent JV deal with Nestle and digital therapeutics will add to the growth of the India market.
“Apart from innovative assets, other areas which will also add to the growth of the India business is Consumer Health…the recent JV deal with Nestle we feel is going to be synergistic in terms of bringing in innovations that are relevant for India and third is the area of digital…we have launched Nerevio for migraine and last month we have launched condition management system for IBS. We will see how this will scale before we bring other offerings for this space. So, what you would see in our aspiration to become and get into the top 5 would be three important growth levers for India…one is to grow the base business, second is to bring in the innovation on top of our base business,” Ramana said.
He also informed that the company will continue to look for inorganic opportunities to bridge gaps in its portfolio in the chronic and acute segments.
On the plans for weight loss drugs and obesity segments, Ramana said: “This is a segment that is important for us not only for India but globally. So this is definitely a focus area for us to ensure that wherever the opportunity arises for us to bring these products into the respective markets we would do so.”
He also informed that Mergers & Acquisitions (M&A) plans are also on the cards and more products will be launched in FY25.
“As far as M&A are concerned we continue to look for opportunities. India is as we said our focus market as far as M&A is concerned and it will continue to be so as we get into FY25 and later years as well,” he told Financial Express.com.
During the quarter, the company launched three new brands in the country, taking the annual total to 13.
“There are a good number of assets that we expect to launch…large part of them especially in innovations is to bring in products that can become the future standard-of-care. But having said that even within our therapeutic areas the attempt would be to look at how we could bring products that have clinical relevance and also if there are opportunities for Loss of Exclusivity (LOE) where the product is relevant and it is the current standard of care. So, that would be the combination of how we plan to bring innovations,” he added.
In Global Generics (GG), Q4FY24 revenues stood at ₹ 61.2 billion, YoY growth of 13 percent and QoQ decline of 3 percent. YoY growth was primarily driven by increase in volumes of base business, new product launches, partially offset by price erosion in certain markets, the company informed.
In Emerging Markets, Q4FY24 revenues stood at ₹ 12.1 billion, YoY growth of 9% and QoQ decline of 6%. YoY growth is attributable to new product launches, while QoQ decline was due to unfavorable forex.
Prathamesh Masdekar, Research Analyst, StoxBox said that the company has delivered healthy revenue growth during the quarter, aided by new product performance, an increase in the volume of base business in the US, new product launch momentum, and strong performance in Europe and partly offset by price erosion in the US and Europe.
“During the quarter, the company launched five new products in the US market. The company is focused on higher investments in sales & marketing activities to strengthen existing brands and new business initiatives including scaling up OTC and consumer health & wellness businesses, digitalization initiatives and building strong commercial capabilities. The company will also actively look for new investment avenues for growth across all the business segments and strengthen its R&D in the biosimilar products pipeline, development efforts across generics, and novel oncology assets,” Masdekar said.
Dr. Reddy’s long-term growth outlook remains intact and we expect the company to continue to deliver robust performance in the upcoming quarters, led by new product launches, market share gains and an increased volume of the base business, he added.
2024-05-07T13:35:41Z dg43tfdfdgfd