Dr. Reddy’s laboratories established in the year 1980’s is one of the most popular and rising global pharma company. The fully integrated pharma company intends to provide innovative and reasonable priced medicines to the people. They are planning to do this through their three core businesses:
The active and custom pharmaceutical businesses consisting of pharma services and active ingredients,
Global generics including branded and unbranded generics,
New Chemical Entities (NCEs), Differentiated Formulations, and Generic Biopharmaceuticals which are categorized under proprietary products.
The main aim of the company is to market their products globally keeping particular focus on India, US, Europe & Russia. The researchers are in the areas of cardiovascular indications, anti-infectives, metabolic disorders and inflammations. The strength of the company lies in their businesses, products and geographies which provides them a strong base in the competitive global market as well as allows them to provide medicines to the people around the globe at affordable prices. The company through their PSAI businesses consisting of Active Pharmaceutical ingredients (API) and the Custom pharmaceutical services (CPS) provides speedy products and cost-effective manufacturing services to their customers, innovators and the companies. Through the PSAI businesses the company is able to offer their customers with:
World class chemistry expertise.
Supply chain management
Diverse product portfolios
Three technology centers and eight FDA researched plants.
Intellectual Property (IP) driven product development for freedom to operate.
Out of the 16 world class manufacturing activities, 9 have a history of USFDA inspections. The company has a capacity to produce 9 billion tablets/capsule per year. Due to the globally synchronized supply chain and information technology platform, customer provides timely delivery and superior returns. Over the years we have understood the expertise of regulatory framework of different countries we operate. The quality control and quality assurance system are strictly followed by Dr. Reddy’s. Dr. Reddy’s conducts NCE drug discovery research in the areas of metabolic disorders, cardiovascular indications, anti-infectives and inflammation.
Board of directors:
The board of directors is the individuals from diverse field. Â In order of exercising strategic supervision, discharging its fiduciary responsibilities, and in ensuring that the management observes the highest standards of ethics, transparency and disclosure threats as autonomy and independence. We have a team of experts in different fields of medicine, chemistry, human research, business strategy, economics, and finance. The executive as well as the non executive employees have full access to the company information. The board appoints various committees to take necessary decisions within the delegated authority and also recommend board of directors about the areas they pursue.
Dr. Anji Reddy ChairmanG.V.Prasad Vice Chairman and Chief Executive OfficerSatish Reddy Managing Director & Chief Operating Officer
Dr. K. Anji Reddy G V Prasad Satish Reddy
Chairman Vice Chairman andÂ Managing director &
Chief Executive OfficerÂ chief operating officer
The above people are the whole-time directors of the company. The management council is considered as the top tier of the management structure of the company. The company’s vision, mission and purpose are brought into reality with the help of the policies, procedures and practices framed by the management team of Dr. Reddy’s. The function of the management is to identify risk and take necessary measures so as to maintain safe, sound and healthy atmosphere within the company.
Alliancing and soaring partnership:-
The company invites and maintains the partnership for commercializing and developing the value chains. The company is agile and integrated with proven R&D and manufacturing capabilities. Across the value chain the company seeks a meaningful collaboration and partnerships. Great relationships based on trust and mutual respect is the core of a successful partnership. And according to the company, partnerships are successful if there is a profit to both the companies. These partnerships are based on a common goal. The main components of negotiation and transaction process are the clarity of thoughts, flexibility, creativity, etc. The company that provides large business opportunities values the time and resources of their potential partners to explore and complete the partnership. In some of the most popular pharmaceutical markets like the US, UK, Germany, India, Russia, etc the commercial presence of the company is very strong.
Financial Details of the company:-
Provision for income tax for 2009-10 amounted to Rs. 985 million as against Rs. 1,172 million in
2008-09. Excluding the impact of impairment, revenues from sumatriptan in both the years ended 31 March 2010 and 2009 and liquidated damages relating to olanzapine patent in Germany in 2009, the company’s effective tax rate for the year ended 31 March 2010 was at 16.7% of profit before tax as compared to 12.4% for the year ended 31 March 2009. This movement is largely on account of lower R&D expenditure resulting in lower weighted deduction, under Indian Tax law and also lower mix of profits from tax exempted manufacturing units in India.
PROFIT / (LOSS) FOR THE YEAR:
Dr. Reddy’s net profit was Rs. 1,068 million in 2009-10, versus a net loss of Rs. 5,168 million in
Revenues increased by 1% to Rs. 70,277 million in 2009-10. In November 2008, the Company launched sumatriptan, the Authorized Generic version of ImitrexÂ®, which contributed Rs. 7,188 million in 2008-09 as against Rs. 2,543 million in 2009-10. Excluding sumatriptan revenues from both the years, the Company’s revenues grew by 9% in 2009-10.
Dr. Reddy’s gross profit remains almost flat at Rs. 36,340 million. Gross profit as a percentage of revenue was 52% in 2009-10, versus 53% in 2008-09. The minor decrease in gross margin was primarily due to a fall in revenues from sumatriptan, which contributed a significantly higher margin in 2008-09.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:
Selling, general and administrative expenses increased by 7% to Rs. 22,505 million in
2009-10. during the year, the Company recorded a one-time charge of Rs. 912 million related to
Termination benefits payable to a set of identified employees in Germany. During the year, we also closed our research facility at Atlanta, Georgia, USA, and announced re-organization of our North America Generics business in Charlotte, North Carolina, USA, which triggered one time
Closure related costs. Other than the above, the selling and administrative expenses remained flat
Primarily due to increase in salaries and inflation in our India business, offset by a decrease in overall costs in Germany due to restructuring. Amortization expenses have almost remained
Flat at Rs. 1,479 million in 2009-10, versus Rs. 1,503 million in 2008-09
R&D expenses fell by 6% to Rs. 3,793 million. As a share of total revenue, R&D expenditure was at 5% in 2009-10, compared to 6% in 2008-09. The fall in R&D expenses was due to lower project expenses and bio-studies costs in 2009-10.
Dr. Reddy’s laboratories have achieved large number of milestones since 1984. The first milestone was one of the biggest achievements in 1984. It was the establishment of Dr, Reddy’s laboratories with a capital investment of 250,000 Rs.
Then one of the biggest milestones got achieved in 1986. The company got listed on the stocks. (Bombay Stock Exchange.) And at the same time it started its international business transaction with the export of methyldopa.
In 1988, company acquired Benzex Laboratories Pvt. Limited.
In India for the first time in 1990, Dr. Reddy’s company exported Norfloxacin and Ciprofloxacin to Europe and Far East.
The first export formulation came to Russia in 1991.
In 1994: company made a GDR issue of USD 48 million. The same year, Foundation stone laid for a finished dosages facility to cater to the highly regulated markets such as the US.
In 1995 the company sets up a new joint venture in Russia.
In 1997, Dr. Reddy’s was the only pharma company in India to out license an original document.
In the past few years it has become India’s most popular pharmaceutical industry and has achieved vast number of milestones.
In 2008, it acquired BASF’s Pharmaceutical manufacturing contract business and related facility at Shreveport, Louisiana. It also acquired Dowpharma’s a small molecule business situated at Mirfield and Cambridge facilities, UK.
Finally in 2009 which is the final year, the company announces a strategic alliance with GlaxoSmithKline plc to market the selected products across the rising markets outside India, it received an approval for Three INDs., & Reorganizes Drug Discovery Operations to merge into Aurigene, a wholly owned independent subsidiary of Dr. Reddy’s.
There is a high commitment in the company’s board of directors, managers and employees to maintain high standards of corporate governance and business ethics. The people believe very firmly that rigorous internal control system, transparent accounting systems and a strong & independent board go a far way in winning the shareholders trust. There are vigorous systems and procedures followed for a smooth functioning of the business. The documents are checked by two auditors viz. internal and external. These auditors have access to all the information and records of the company. The internal control system of the company is checked by both the auditors and they provide some suggestive measures to the board to take corrective measures whenever necessary. Dr. Reddy’s was the first manufacturing company in India, and one of the first in Asia, to be Sarbanes-Oxley certified on June 1 2006.
The company has one of the highest ethical standards in their operations and behavior as it is a value based socially responsible organization. Due to the high ethical standards, company has earned respect and loyalty of business partners; customers, shareholders, and the media. Every employee regardless of his position or level have to adopt a code of business conduct and ethics (COBE), which lays down company’s principal of conduct. The company’s success depends entirely on the trust of their shareholders. COBE is a normal statement suggesting the goals and statements, missions for every particular employee as well as company’s conduct.
Large number of systems and procedures has been established in the company which can disseminate important information to the stakeholders. This information is also showed to the shareholders, analysts, suppliers, customers, and society at large. The primary source of company’s information is on the website: www.drreddys.com. All the other information, news articles, journals, presentations to the investors, etc is updated regularly on the web site. The financial annual and quarterly reports are published regularly in the local newspaper. International review is also done with the help of media, internet and wires.
Social & Environmental Norms:-
Each and every industry should contribute a large amount of their work towards the improvement of environment. Dr. Reddy’s is trying to reduce their ecological footprint since a decade. New and constructive ways are found by the company to minimize their impact on the environment. The company is successful in reducing the solvent usage with the use of innovative resin based technologies. The company has developed alternate catalysts to replace the hazardous and toxic catalysts, thereby improving reaction efficiency. The company’s new infrastructural projects have subscribed to the ‘green’ commitment. Companies innovative plaza, the R&D hub and the leadership academy have some specific features to save lighting, cooling and water. Through Dr. Reddy’s foundation DRF, education support and livelihood creation programs are started for the underprivileged youth. DRF encourages and trains the youth to enter into the entry level jobs in high growth sectors. Until now DRF has been successful in creating more than 15000 livelihoods. The Beta institute, a non-profit organization of Beta pharma in Germany develops new project and conducts various research in social health projects, offering training and consultancy. The Dr. Reddy’s foundation for health care is designed to improve patient care and create responsive, integrated health care services. The other foundation of Dr. Reddy’s is the ‘Sparsh: A touch of caring’. It is the foundation which supplies free medicines to the economically challenged areas. The company takes some massive steps in protecting the environment and reducing global warming. For this purpose it measures the environmental impact of their operations with the help of key parameters like water consumption, effluent discharge, COD & TDS, load discharge. Out of the six API units, five units received Zero discharge status.
National and International achievements:-
The company has 34 product families marketed in the United States. It is ranked among the top 12 Generic companies. In EU, the company has marketed its 160 products out of which 30 products are marketed in the United Kingdom’s. In the European Union the company’s presence was consolidated with 145 products in the market. It was due to the acquisition of a Germany’s 5th largest generic company known as Betapharm. More than 200 products are offered by the company’s branded generics portfolio. These brands are enjoying a key position in major markets like India, Romania, Russia and the CIS countries. The companies due to its better customer relationships, quality medicines and better delivery services have developed the most trusted image across the globe. The company has six finished dosages manufacturing companies India and one in the US which provides quality products at cost effective rates. Dr. Reddy’s is the only Indian pharmaceutical company to out-license an original molecule to an innovator company in 1977. Today this is the only Indian company with their product in the global phase III trial for the NCE- Balaglitazone. Promius Pharma, the wholly owned subsidiary of the company has its headquarters in New Jersey, US. For important dermatology indications it develops and markets differentiated formulations. The company is the first to develop the biosimilar, GrafcelTM which is a cancer drug that stimulates bone marrow to replace with the white blood cells in the body which were lost due to chemotherapy. Currently the company has eight products in the pipeline with a motive to build one of the largest portfolios of biosimilar in the world. The company is the home for almost 11000 associates all over the world. The companies have Active Pharmaceutical Ingredients plant in United Kingdom. The company provides graduates and post graduates with an opportunity for global internships for the purpose of providing a right transition platform from university to a real business world. The company received Economic times corporate excellence award-Best Corporate Citizenship, 2009. It also received the Global HR excellence award- Asia Specific HR congress, 2009. Dr. Reddy’s is the first pacific pharmaceutical company outside Japan to be listed on the New York Stock Exchange. The company is ranked among the top 3 API players in the world. It is the 7th ranked largest generic company in Russia.
To conclude this vast topic, Dr. Reddy’s pharma company is ranked among the world’s top pharma companies. The project highlights the profile of the company, its foundation and the innovative ways to manage the risk elements with the help of management and the board of directors. The financial figures for the year 2009-2010 are highlighted. It depicted the milestones achieved by the company since 1984 viz. from the time of its foundation. The company has a large workforce of 11000 people which could have been utilized for a substantial growth in the sector. The company has been extremely successful in meeting its corporate social responsibilities. This success can be visible by evaluating the social and environmental norms of the company. Within the next five years, Dr. Reddy’s company is expecting to be the ruler of the pharmaceutical companies across the globe.