Dr. Reddy's Q3 FY07 Revenue at Rs 15,434 Million.Net Income at Rs 1,879 Million; Nine Months Revenues Cross USD USD In currencies, this is the abbreviation for the U.S. Dollar. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1 Billion HYDERABAD, India -- Dr. Reddy's Laboratories Dr. Reddy’s Laboratories Ltd. (Reddy's), founded in 1984 by Dr. K. Anji Reddy, has become India’s third biggest pharmaceutical company. Reddy had worked in the publicly-owned Indian Drugs and Pharmaceuticals Ltd. Ltd. (NYSE NYSE See: New York Stock Exchange : RDY RDY Ready ) today announced its unaudited financial results for the quarter ended December 31, 2006. * Q3 FY07 Revenue at Rs 15.4 billion($350 mn) as against Rs 5.9 billion($134 mn) in Q3 FY06 * Q3 FY 07 PAT at Rs 1,879 million($43 mn) as against Rs 628 million($14 mn) in Q3 FY06 * Launch of Ondansetron tablets (generic version of Zofran[R]) with 180-day marketing exclusivity in end December 2006; Captures 55% share of the total market * 9 month ended FY 07, Revenue at Rs 49.5 billion ($1.1 bn) * 9 month ended FY 07, PAT at Rs 6 billion ($138 mn) Q3 FY07 Key highlights * Revenues at Rs 15.4 billion($350 mn) in Q3 FY07 as against Rs 5.9 billion($134 mn) in Q3 FY06, representing an increase of 160% * Revenues from international markets increased by 241% at Rs. 13.2 billion($299 mn); Contributed 86% to total revenues as compared to 65% in Q3 FY06 * Revenues from core businesses (excluding the contribution from authorized generics and acquisitions), increased by 38% to Rs 8.2 billion($186 mn) from Rs 5.9 billion($134 mn). * Revenues in the API (Application Programming Interface) A language and message format used by an application program to communicate with the operating system or some other control program such as a database management system (DBMS) or communications protocol. business increased by 29% to Rs 2.7 billion($62 mn) in Q3 FY07 from Rs. 2.1 billion($48 mn) in Q3 FY06 primarily driven by sales of sertraline sertraline /ser·tra·line/ (ser´trah-len) a selective serotonin reuptake inhibitor used as the hydrochloride salt in the treatment of depression, obsessive-compulsive disorder, and panic disorder. . * Revenues in branded formulations business increased by 18% to Rs. 3.2 billion($72 mn) in Q3 FY07 from Rs. 2.7 billion($61 mn) in Q3 FY06 driven by growth in India & Russia. * Launched ondansetron, generic version of Zofran[R] tablets, toward the end of December 2006 with 180-day marketing exclusivity. The Company captured 55% share of the total market and achieved sales of Rs. 223 million($5 mn) in Q3 FY07. * Revenues from betapharm (Germany) at Rs. 2,664 million($60 mn) in Q3 FY07. This compares with revenues of Rs. 2,554 million in Q2 FY07. * Revenues from custom pharmaceuticals services business increased to Rs 1,569 million($36 mn) in Q3 FY07 from Rs 101 million($2 mn) in Q3 FY06. Commenting on the landmark, GV Prasad Prasāda (Sanskrit: प्रसाद), prasād/prashad (Hindi), Prasāda in (Kannada), prasādam (Tamil), or prasadam , CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Dr. Reddy's Laboratories, said, "Fiscal 2007 has been a truly extraordinary year for Dr. Reddy's in many ways. For the first time in the history of Dr. Reddy's, we have crossed USD 1 billion in revenues. Starting as an API manufacturer addressing the Indian market, over the last 22 years of our journey, Dr. Reddy's has grown into a vertically integrated global pharmaceutical company with activities spanning the entire pharmaceutical value chain." [TABLE OMITTED] SEGMENTAL segmental /seg·men·tal/ (seg-men´t'l) 1. pertaining to or forming a segment or a product of division, especially into serially arranged or nearly equal parts. 2. undergoing segmentation. ANALYSIS Active Pharmaceutical Ingredients (APIs) * Revenues at Rs 2.8 billion in Q3 FY07 as against Rs 2.1 billion in Q3 FY06 , representing an increase of 29%. * Revenues outside India at Rs 2.2 billion in Q3 FY07 as against Rs 1.5 billion in Q3 FY06 , representing an increase of 49%; Contributed 82% of total segment revenues as compared to 72% in Q3 FY06. * Revenues in Europe grew by 34% to Rs. 515 million in Q3 FY 07 from Rs. 384 million in Q3 FY06 primarily driven by sales of key products of sertraline and sumatriptan sumatriptan /su·ma·trip·tan/ (soo?mah-trip´tan) a selective serotonin receptor agonist used as the succinate salt in the acute treatment of migraine and cluster headaches. su·ma·trip·tan n. . * Revenues in rest of the world markets increased by 62% to Rs. 1,205 million in Q3 FY07 from Rs. 744 million in Q3 FY06, primarily driven by sales of sertraline. * Revenues in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. increased by 39% to Rs 527 million in Q3 FY07 as against Rs 379 million in Q3 FY06 driven by combination of existing products as well as new productions under development. * Revenues in India at Rs 482 million in Q3 FY07 as against Rs 601 million in Q3 FY06, representing a decline of 20%, primarily on account of volume decline in key products. * The Company filed 15 US DMFs during the quarter taking the total filings to 101. The company also filed 3 DMFs in Canada. Generic Finished Dosages * Revenues in this segment at Rs 7,682 million in Q3 FY07 as against Rs 831 million in Q3 FY06. * North America contributed 60% and Europe contributed 40% to the segment revenues. * In North America, revenues increased to Rs. 4,630 million in Q3 FY07 from Rs. 480 million in Q3 FY06. Combined revenues of simvastatin simvastatin /sim·va·stat·in/ (sim´vah-stat?in) an antihyperlipidemic agent that acts by inhibiting cholesterol synthesis, used in the treatment of hypercholesterolemia and other forms of dyslipidemia and to lower the risks associated and finasteride Finasteride Definition Finasteride is a drug that belongs to the class of androgen inhibitors, which means that it blocks the production of male sex hormones. It is sold in the United States and Canada under the brand names Proscar and Propecia. were at Rs. 3,385 million. Fexofenadine launched in April contributed Rs. 479 million and ondansetron launched in the end of December 2006, contributed Rs. 223 million in revenues during the quarter. * In Europe revenues increased to Rs.3,035 million in Q3 FY07 from Rs.347 million in Q3 FY06. * Revenues from betapharm (Germany) at Rs. 2,664 million in Q3 FY07 as compared to Rs. 2,554 million in Q2 FY07. * Revenues from UK market increased to Rs. 357 million in Q3 FY 07 from Rs 347 million in Q3 FY06. * Revenues from Spain at Rs. 14.3 million. * During the quarter, the Company filed 5 ANDAs and received final approval for 4 ANDAs. As at the end of December, the total ANDAs pending approval (including tentative) are 58. Branded Finished Dosages - International * Revenues at Rs 1.6 billion in Q3 FY07, an increase of 18% over Q3 FY06 . The growth was primarily driven by strong growth in key markets. * Revenues in Russia increased by 18% to Rs. 950 million in Q3 FY07 as against Rs 803 million in Q3 FY06. This growth was primarily driven by increase in sales from key brands of Nise, Cetrine and Keterol as well as new product launched during the year. * Revenues in CIS Cis (sĭs), same as Kish (1.) (1) (CompuServe Information Service) See CompuServe. (2) (Card Information S markets increased by 19% to Rs 321 million in Q3 FY07 as against Rs 271 million in Q3 FY06. This growth was primarily driven by increase in sales from Ukraine, Belarus and Uzbekistan. * Revenues in Central and Eastern Europe The term "Central and Eastern Europe" came into wide spread use, replacing "Eastern bloc", to describe former Communist countries in Europe, after the collapse of the Iron Curtain in 1989/90. grew by 60% to Rs 119 million in Q3 FY07 as against Rs 74 million in Q3 FY06. This growth was mainly on account of growth in Romania partially offset by decline in Albania. * As per Pharmexpert, for the period July to September, Dr. Reddy's rank in the retail segment improved to 12th position from 17th position. Branded Finished Dosages - India * Revenues were at Rs 1.6 billion in Q3 FY07, representing an increase of 18%, from Rs. 1.3 billion in Q3 FY06. This growth was primarily driven by growth in key brands of Omez, Nise and Razo. * New products launched during the year, totaling 18, contributed Rs. 71 million in revenues in Q3 FY07. * As per ORG IMS (1) See IP Multimedia Subsystem. (2) (Information Management System) An early IBM hierarchical DBMS for IBM mainframes. IMS was widely implemented throughout the 1970s under MVS and continues to be used under z/OS. , Dr. Reddy's industry ranking improved to 9th for November 2006 as compared to 12th for August 2006. * As per CMARC report for the period July to October 2006, Dr. Reddy's is the fastest growing company among the Top 10 companies. Custom Pharmaceutical Services (CPS (1) (Characters Per Second) The measurement of the speed of a serial printer or the speed of a data transfer between hardware devices or over a communications channel. CPS is equivalent to bytes per second. ) * Revenues from CPS increased to Rs 1,569 million in Q3 FY07 from Rs 101 million in Q3 FY06. * Revenues from the acquisition in Mexico at Rs. 1,197 million in Q3 FY07 as compared to Rs. 1,434 million in Q2 FY07 * Excluding contribution from the acquisition, revenues increased from Rs. 101 million in Q3 FY06 to Rs. 371 million in Q3 FY07, driven by growth in customer base and product portfolio. Emerging Business * Revenues in the critical care & biotechnology segment at Rs. 204 million, an increase of 20%. Income Statement Highlights * Gross profits increased to Rs. 6.7 billion in Q3 FY07 from Rs. 3.0 billion in Q3 FY06. Gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. on total revenues at 44% as against 51% in Q3 FY06. Revenues from authorized generics contributed 22% to total revenues and earned gross margin which are significantly below company average gross margin. * R&D investments (net) at 4% of total revenues as against 9% in Q3 FY06. Gross R&D investments increased by 32% to Rs 832 million as against Rs 628 million in Q3 FY06. During the quarter, the Company recognized Rs 156 million under its R&D partnerships as a benefit to the R&D line item as compared to Rs. 112 million recognized in Q3 FY06 * Selling, General & Administration (SG&A) expenses increased by 78% to Rs 3.6 billion. This increase is primarily on account of consolidation of the two acquisitions. As % to revenues adjusted for authorized generics, the SG&A ratio is at 30%. * Other expense (net) was Rs 241 million as against other income (net) of Rs 177 million in Q3 FY 06. This is primarily on account of net interest expense of Rs.309 million in Q3 FY07 as against a net interest income of Rs. 146 million in Q3 FY06. * Amortization was Rs. 330 million compared to Rs. 86 million in Q3 FY06. This includes amortization of Rs. 264 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc intangibles in betapharm, Spain (acquisition of products) and acquisition in Mexico. * Net income at Rs 1,879 million (11% of total revenues) as against Rs. 653 million (11% of total revenues) in Q3 FY06. This translates to a diluted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of Rs 11.73 as against Rs 4.09 in Q3FY06. * During Q3 FY07, the Company incurred capital expenditure (net) of Rs 1,212 million. 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 A dosage form is the physical form of a dose of medication, such as a capsule or injection. The route of administration is dependent on the dosage form of a given drug. , 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 cancer, diabetes, cardiovascular, inflammation and bacterial infection. Disclaimer This press release includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , as defined in the U.S. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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. Notes 1. In line with global disclosure standards, the company commenced reporting its financials on a consolidated basis since Q1 FY03. 2. Current quarter financial discussions below are on a consolidated basis as per the US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . 3. Detailed analysis of the financials is available on the Company's website at www.drreddys.com. |
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