Dr. Reddy's and ICICI Venture Announce USD 56 Million-Partnership for the Commercialization of ANDAs.

HYDERABAD & MUMBAI, India -- Dr. Reddy's Laboratories 

--Dr. Reddy's unique initiative to partner with India's largest private equity investor for pipeline expansion for the U.S. Generics market

--Dr. Reddy's to leverage global scale and infrastructure for pipeline expansion

--ICICI Venture to share product development costs

Dr. Reddy's Laboratories (NYSE: RDY) announced today that the Company has entered into a USD 56 million agreement with ICICI Venture Funds Management Company for the development and commercialization of ANDAs to be filed in 2004-05 and 2005-06.

Under the terms of the agreement, ICICI Venture will fund the development, registration and legal costs related to the commercialization of ANDAs on a pre-determined basis. This agreement covers most of the ANDAs to be filed by Dr. Reddy's during the years 2004-05 and 2005-06. On commercialization of these products, Dr. Reddy's will pay ICICI Venture royalty on net sales for a period of 5 years. The specific financial terms of the agreement have not been disclosed.

Under the terms of the agreement, ICICI Venture will fund USD 22.5 million dollars in the first phase with an option to invest an additional USD 33.5 million dollars in the second phase.

Commenting on the partnership, GV Prasad, Chief Executive Officer, said, "We are pleased to partner with ICICI Ventures in what I believe is an unique R&D funding model. This model will enable us to share the product development costs while leveraging our global scale and infrastructure. We look forward to a successful partnership with ICICI Venture."

Commenting on the partnership, Renuka Ramnath, Managing Director and Chief Executive Officer, ICICI Venture, said, "This is an exciting and new concept of R&D risk capital funding model in India. The innovative structure of the deal is part of our continuing philosophy of promoting India's story. We believe that Dr. Reddy's commitment to R&D will make this partnership successful and mutually beneficial."

About Dr. Reddy's

Established in 1984, Dr. Reddy's Laboratories (NYSE: RDY) is an emerging global pharmaceutical company with proven research capabilities. The Company is vertically integrated with a presence across the pharmaceutical value chain. It produces finished dosage forms, active pharmaceutical ingredients and biotechnology products and markets them globally, with focus on India, US, Europe and Russia. The Company conducts research in the areas of diabetes, cardiovascular, anti-infectives, inflammation and cancer.

About ICICI Venture

ICICI Venture, incorporated in 1988, as a wholly owned subsidiary of ICICI Bank, is the most experienced and largest private equity and venture fund management company in India with funds currently under management in excess of Rs.20 billion (USD 400 million). Over the last 15 years, ICICI Venture has been successful in identifying trends well ahead of the curve; be it retail, media and entertainment, information technology, real estate or pharmaceuticals and biotechnology. During this period ICICI Venture launched and managed 8 funds with a corpus exceeding Rs. 20 billion (USD 400 million). Each fund had a distinct investment theme and ICICI Venture today has some of the best known and managed companies in India in its portfolio.

Disclaimer

This press release includes forward-looking statements, as defined in the U.S. Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such factors include, but are not limited to, changes in local and global economic conditions, our ability to successfully implement our strategy, the market acceptance of and demand for our products, our growth and expansion, technological change and our exposure to market risks. By their nature, these expectations and projections are only estimates and could be materially different from actual results in the future.

Contact Information

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Media: R Rammohan at [e-mail] or on [phone]