DRIVIN G ROWTH - Dr. Reddy's

54
management discussion
and analysis
With a large number of blockbuster drugs
going off-patent by 2005, the generics
market in the developed world is estimated
to reach a size of US$ 45 billion. Given Dr.
Reddy’s strengths in process R&D, skills in
bulk manufacturing, compliance with cGMP
and IPR, and the experience gained from
international regulatory filings and patent
challenges, the Company feels confident of
its future prospects in this business. The
Company is on its way towards building a
direct marketing presence for its generics
business in the US.
EMERGING BUSINESSES
THE REVENUE FROM this segment for
2001-02 was Rs. 358 million, compared to
Rs. 287 million in FY 01. The 25 per cent
growth in revenue was largely due to the
increase in sales of the critical care division,
especially sale of oncology products. There
were three new launches of oncology
products, and two line extensions. These
were: (i) Lomtin (lomustine), (ii) Tabi (bicalutamide),
(iii) Grastim (filgrastim), (iv)
Docetere 120 mg and (v) Cytogemi 100 mg.
CUSTOM CHEMICAL SERVICES
(CCS)
AT PRESENT, CCS LOOKS like a
small operation. However, Dr. Reddy’s
believes that there are large growth
opportunities in this area, which can
leverage the Company’s skills in chemistry
to do high value contract research for
international innovator companies.
Dr. Reddy’s brand new Technology
Development Centre (TDC) became
operational in the last quarter of 2001-02,
and is intended to be a centre of excellence
for chemistry process development. The
facility includes synthetic organic chemistry
labs and an integrated kilo lab, and is
currently manned by 60 chemists. TDC is
expected to be the growth platform for CCS.
research & development
and drug discovery
THE CORE OF DR. REDDY’S
vision is drug discovery. In 2001-02, the
Company incurred revenue expenditure
Rs. 980 million on R&D or 6.3 per cent of
total revenue, versus Rs. 608 million in
2000-01. The increase in R&D spend is
primarily on account of growth in basic
research expenditure, subscription fee to
Incyte Genomic Data Bases for detailed,
annotated data on gene sequences, and
increase in ANDA filings.
Besides the setting up of the TDC
mentioned above, there have been several
R&D milestones during the year.
DR. REDDY’S LABORATORIES LTD. | MANAGEMENT DISCUSSION AND ANALYSIS | ANNUAL REPORT 2001-2002