Dr Reddy’s seeks to revamp generics biz after remediation with USFDA flops

The management at pharmaceutical major, Dr Reddy’s Laboratories, has set about trying to bring its house in order, with the considerable time and energy it spent in negotiating an early closure of compliance issues involving USFDA’s warning letter having come a cropper. The company recently announced a series of steps, including the reversal of business decisions taken earlier. The management stated upfront the reason for its decisions such as the sale of the Bristol manufacturing facility and the reversal of a couple of other earlier business decisions. The sale of the Bristol manufacturing is in line with the company’s stated priority of streamlining and optimizing our global cost structures, and helps to focus on other businesses priorities to drive growth.

Dr Reddy’s product strategy, however, has faced challenges due to the prolonged waiting time for approval of such products, resulting in fewer launches as compared to the faster approvals given to normal generic products. This has resulted in a fall in US revenues, which account for half the company’s global generic revenues. To overcome this challenge, the senior management officials would be pursuing the launch of more number of me-too generic products to sustain the revenue growth some time back. But this new strategy is yet to play out in full.