IBS

Affordability & Innovative Medicines

A study on Dr.Reddys Laboratories

Group members (Sec: B):

Rajnikanth Rajhans 09BSHYD

Rahul T 09BSHYD1108

Santosh M 09BSHYD0737

Jitendu kumar Dixit 09BSHYD

Namitha 09BSHYD
 Table of contents

Table of contents.........................................................................................................................................1
The pharmaceutical market: An introduction..............................................................................................2
The global scenario:................................................................................................................................3
Scenario of the Indian pharmaceutical market:........................................................................................4
Industry structure (segmentation)........................................................................................................4
India pharmaceutical market segmentation: %share, by value.............................................................5
Macro economic factors influencing the industry....................................................................................5
The PESTEL framework.....................................................................................................................5
Company analysis........................................................................................................................................7
Introduction.............................................................................................................................................7
Company overview..................................................................................................................................7
Geographic presence:..............................................................................................................................9
The DNA of sustainability.....................................................................................................................10
Strategy.....................................................................................................................................................15
Strategic positioning: SWOT analysis...................................................................................................17
The pharmaceutical market: An introduction

The modern pharmaceutical industry is a highly competitive non-assembled global industry. Its
origins can be traced back to the nascent chemical industry of the late nineteenth century in the
Upper Rhine Valley near Basel, Switzerland when dyestuffs were found to have antiseptic
properties.
The global scenario:
Emerging markets are set to play a pivotal role in future pharmaceutical success: Currently,
emerging pharmaceutical markets are typically small. However, their rapid growth vis-à-vis the
more regulated markets make them attractive prospects for the pharmaceutical industry. Rapidly
growing economies, increasing population and greater health awareness combined with larger
incomes to spend on healthcare will drive the growth of pharmaceuticals in emerging markets.
By 2017, IMS forecasts revenues from emerging markets at US$ 290 billion to US$ 320 billion,
with a CAGR of 12% to 15%.
Therapy area growth dynamics will be driven by innovation cycles and unmet needs:
As the pharmaceutical industry’s research and development (R&D) programs adjust to creating
low-cost generic options in many chronic therapy areas, higher growth will occur in those areas
where there is significant unmet clinical need. In oncology, diabetes, multiple sclerosis and HIV,
annual growth is expected to exceed 10% right up to 2014, as new drugs are brought to market,
patient access is expanded and funding is redirected from other areas where lower-cost generics
take over.
Transition from small molecules to big molecules, or the expansion of Biologics in
developed markets; and branded and off-patent small molecule medicines in fast growing
emerging markets:
In the developed markets of the US, Europe and Japan, the industry is perceptibly moving away
from the small molecule driven sales model, towards targeting specialist secondary care
indications through the use of high-value biologic therapies. The key driver of sales growth up to
year 2014 will be injectable biologic therapies for the treatment of more secondary care
indications. In emerging markets, branded and off-patent medicines will continue to dominate,
with occasional breakthroughs and revenue spikes coming from Biologics. Primary care drugs
will still drive sales in these markets, with medicines for infectious diseases and endocrine /
metabolic disorder experiencing the largest growth.
Mergers, acquisitions and strategic partnerships are here to stay:
In line with recovery from the global economic downturn, the number of M&A and strategic
deals has been on the rise throughout the second half of 2009. While neither M&A nor strategic
partnerships can totally offset sales declines from the impending patent cliff of 2011, these
partnerships and mergers will offer improved profitability because of higher combined sales, cost
saving opportunities and operational synergies.
 % Share
South Korea; 7.7
India; 8.7
Japan
China
Rest Of Asia Pacific
Rest Of Asia Pacific; 10.6
India
Japan; 53.8 South Korea
China; 19.1

Scenario of the Indian pharmaceutical market:

Indian companies have recognized the opportunity presented by western pharma in search of
lower costs and higher profits, and are exploiting the low cost base and pool of highly skilled
labour in their market to develop a thriving outsourcing industry, positioning India as a key
provider of contract research and manufacturing services.
The Indian pharmaceutical market has seen a CAGR of about 14% in the last five years. It
continues to be highly fragmented and
dominated by Indian companies. The domestic pharmaceutical industry grew by 18% in March
2010 (ORG’s moving annual total, or MAT) versus 10% in March 2009. Acute therapy
dominates, with a share of over 75% of the total market value. The chronic segment has
registered a growth of 21%, versus 16% in the acute segment. Anti-infectives grew by 14%,
respiratory and dermatology by 21%, cardiac by 21% and CNS by 20%. The Government of
India’s Vision 2015 statement indicates an 18% plus CAGR for the pharmaceutical sector,
translating to a doubling of revenues over the next five years. According to this report, growth
will be driven by all verticals: domestic formulations, generics exports, and outsourcing. By
2015, the report expects specialty and super-specialty therapies to account for 45% of the market.
Growing lifestyle disorders, particularly metabolic disorders like diabetes, obesity and
hypertension, coronary heart disease, cardiovascular, neuropsychiatry and oncology drugs are
likely to gain significance.

Industry structure (segmentation)

Alimentary/Metabolism sales generated 13.8% of the Indian pharmaceutical market’s overall
revenues. Cardiovascular sales generated 11.9% of the market’s aggregate revenues.
CATEGORY %SHARE
Other therapeutic purposes 54.70
Alimentary/Metabolism 13.80
Cardiovascular 11.90
Respiratory 10.00
Central Nervous 6.10
Oncology 3.50
Total 100.0%

India pharmaceutical market segmentation: %share, by value

% Share
Oncology
Central Nervous System 4%
6%
Respiratory
10%

Cardiovascular
12% Other therapeutic purposes
55%

Alimentry/Metabolism
14%

Macro economic factors influencing the industry

The effect of macro economic variables on the industry can be better understood by carrying out
the PESTEL analysis. In this method of analysis, we would be understanding the political,
economic, socio-cultural, environmental and legal aspects which would impact the industry.

The PESTEL framework

Political factors
Over the years, the industry has witnessed increased political attention due to increased
recognition of the economic importance of healthcare as a component of social welfare. Political
interest has also been generated because of the increasing social and financial burden of
healthcare. Also, uncertainty in the political environment also impacts the investments and the
investor confidence. The patent act has also impacted the pharmaceutical industry. Therefore
different brands of the same medicine were truly different.
Economic factors
The per capita income of the people determines the extent to which people are willing to spend
on healthcare. In India, majority of people visit doctors only in case of emergency. Only very
few percentage of people visit doctors for regular health check ups. Also, in the past decade, the
pharmaceutical industry has witnessed high value mergers and acquisitions. Hence, the Indian
products have started to cater to global markets as well. This has led to rapid development of the
industry. Many companies are looking at African countries as a key strategic market for
pharmaceuticals.
Socio cultural factors
In India people prefer using household treatments handed down for generations for common
ailments. Though this practice has seen drastic decline in the recent past, it is not completely
wiped out yet. The use of magic/tantrics/ozhas/hakims is prevalent in many under developed
rural areas. Also, increasing population, increase in pollution have resulted in increased health
problems. But the effect of intense media and political attention has resulted in increased
industry efforts to cater to all segments of the population.
Technological advances
Newer medications for various ailments have been discovered due to improvements in
technology which has led to more efficient research and development. New molecules and active
ingredients have been discovered.
Legal factors
The pharmaceutical industry is a highly regulated and compliance enforcing industry. As a result
there are immense legal, regulatory and compliance overheads which the industry has to absorb.
In most of the cases, this tends to restrict its dynamism.
Company analysis

Introduction
Established in 1984, Dr. Reddy’s Laboratories (‘Dr. Reddy’s’ or ‘the Company’) is an integrated
global pharmaceutical company committed to providing affordable and innovative medicines
through its three core businesses:

 Global Generics, which includes branded and unbranded prescription and over-the-
counter (OTC) drug products.

 Pharmaceutical Services and Active Ingredients (PSAI), comprising Active

Pharmaceutical Ingredients and Custom Pharmaceutical Services.

Proprietary Products, comprising Generic Biopharmaceuticals, New Chemical Entities

(NCEs), Differentiated Formulations and a dermatology focused specialty company – Promius
TM Pharma. The Company has a strong presence — in highly regulated markets such as the
United States, the United Kingdom, Germany, as well as in emerging markets including India,
Russia, Venezuela, Romania and certain CIS countries

Company overview

FINANCIAL HIGHLIGHTS

 Consolidated revenues for 2009-10 were Rs. 70,277 million. Excluding revenues from
sumatriptan —Dr. Reddy’s Authorized Generic version of Imitrex® which was launched
in 2008-09 — the Company’s overall revenue grew by 9%. In US dollar terms, 2009-10
revenue was US$ 1.56 billion, compared to US$ 1.37 billion in the previous year. It may
be noted that the Company’s revenue has been rising at a CAGR of 23% over the last 10
years.
 Adjusted EBITDA of Rs. 15,828 million is highest among pharmaceutical companies in
India in the year 2009-10.
 Return on Capital Employed (RoCE) at 17% for 2009-10 as against 14% in 2008-09.
This increase is attributable to:
 Core business growth of India, Russia and North America;
 Rationalization of business model; and
 Cost optimization and restructuring initiatives.
BUSINESS HIGHLIGHTS

 In the US market, 2009 saw Dr. Reddy’s enter the list of the Top 10 generic
companies.The Company has broken into the Top 10 league by improving its market
share from 2.1% to 2.7%. This is a significant milestone, and corroborates Dr. Reddy’s
longer term target of becoming a leading generics player in the US. At 6.5%, the
Company’s growth in the US generics market was one percentage point higher than the
average growth recorded by all the generic firms in the industry. In doing so, Dr. Reddy’s
achieved a prescription growth of 40%. Nine new products were launched in the US
generics market in 2009-10, including one over the counter (OTC) product. The key
launches include nateglinide, omeprazole magnesium (OTC), metformin glyburide and
fluoxetine DR.
 India & Russia, both key emerging markets for the Company, registered impressive
performance.In India, branded formulation revenues grew by 20% to Rs. 10,158 million.
New product revenues contributed to 5% of total revenues from India formulations. The
Company’s new product rank improved from 25th in 2008-09 to 8th in 2009-10. In
Russia, Dr. Reddy’s revenues grew by 25% — out-performing market growth of 8% in
value terms .
 Germany-Ongoing healthcare reforms and changing market dynamics continue to cause
pricing pressures, leading to low margins. To remain competitive in this scenario, the
Company has rationalized its field force and moved towards a lean operating model. In
2009-10, the Company recorded a one-time charge of Rs. 912 million related to
termination benefits payable to a set of identified employees. Moreover, the results of
additional tenders in Germany led to further deterioration in the market dynamics,
thereby resulting in the Company recording an impairment loss of:
 Rs. 2,112 million for the product related intangibles.
 Rs. 5,147 million towards carrying value of goodwill, and
 Rs. 1,211 million towards the trademark /brand, ‘beta’, which forms a
significant portion of the betapharm cash generating unit.
  Successful audits of the Company’s formulations and chemical plants 2009-10 saw
successful US Food and Drug Authority (USFDA) audits of the Company’s formulation
plants at Bachupally, Hyderabad and Vishakapatnam, the ANVISA audit of the
formulation plant at Vishakapatnam and the MHRA audit of the chemical plants.
 Product pipeline continues to show impressive growth potential
 The Company has filed 158 cumulative Abbreviated New Drug Applications
(ANDAs) up to date. As on 31 March 2010, there were 73 ANDAs pending
approval at the USFDA, of which 38 are Para-IV filings and 12 have the
status of ‘first to file’.
 It has filed 19 Drug Master Files (DMFs) in the US during the year, taking the
total filings to156. It also filed five DMFs in Canada, eight in Europe, and
four in the Rest of the World(RoW).
 In addition, Dr. Reddy’s has generated a sound near-term pipeline of limited
competition / high margin opportunities of generic products and biosimilars.
 Dr. Reddy’s and Rheoscience announced the first Phase III clinical trial of
Balaglitazone(DRF 2593) with results of significant reductionin HbA1c
(glycosylated haemoglobin) and improved safety profile.

Geographic presence:

Dr. Reddy’s markets its products in approximately 100 countries, focusing on the US, Europe,
India and Russia.

Dr Reddy's Laboratories in the European Union (EU):

In 2005-06, Dr. Reddy’s generated a revenue of EUR 80.27 million from Europe, which
accounted for 18 per cent of the company’s total revenue.

Dr Reddy's Laboratories in Germany

In March 2006, Dr. Reddy’s acquired Betapharm Arzneimittel GmbH from 3i for EUR 480
million. This is one of the largest-ever foreign acquisitions by an Indian pharmaceutical
company. Betapharm, Germany’s fourth-largest generics pharmaceutical company employs more
than 350 personnel. Its turnover amounted to EUR 186 million in 2005. It commands a share of
approximately 3.5 per cent in the German pharmaceutical market. Betapharm has a reputed team
of experienced regulatory experts who maintain harmonious relationship with EU authorities.
The acquisition of this company is expected to help Dr. Reddy’s emerge as one of the leading
generics players in Europe.

Dr Reddy's Laboratories in the UK

In March 2002, Dr. Reddy’s acquired BMS Laboratories, Beverley, and it’s wholly owned
subsidiary Meridian Healthcare, for EUR 14.81 million. These companies deal in oral solids,
liquids and packaging, with manufacturing facilities in London and Beverley in the UK.
Recently, Dr.Reddy’s entered into an R&D and commercialization agreement with Argenta
Discovery Ltd, a private drug development company based in the UK, for the treatment of
COPD.
Dr Reddy's Laboratories in other EU Countries
Apart from subsidiaries in Germany, and the UK, Dr. Reddy’s has agreements in the following
EU countries:
• Denmark:
Dr. Reddy’s entered into a 10-year agreement with Rheoscience A/S of Denmark for the joint
development and commercialization of Balaglitazone (DRF-2593), a molecule for the treatment
of type-2 diabetes. Rheoscience will hold this product’s marketing rights for the EU and China,
while the rights for the US and the rest of the world will be held by Dr. Reddy’s.
• Ireland:
Dr. Reddy’s conducted clinical trials of its cardiovascular drug RUS 3108 in Belfast, Ireland, in
2005.The trials were conducted to study the safety and the pharmacokinetic profiles of the drug,
which is intended for the treatment of atherosclerosis, a major cause of cardiovascular disorders.
• The Netherlands:
Dr. Reddy’s entered into a marketing agreement with Eurodrug Laboratories, a pharmaceutical
company based in Netherlands, for improving its product portfolio for respiratory diseases. It
introduced a second-generation xanthine bronchodilator, Doxofylline, which is used for the
treatment of asthma and chronic obstructive pulmonary disease (COPD) patients.

The DNA of sustainability

At Dr. Reddy’s, Sustainability is a way of life and is embedded in their purpose. It is a broad
concept which encompasses how they value their employees, social impact of their products,
patient centric programs, proactive safety, health and environment (SHE) management,
implementation of community development projects and voluntary engagement with the society
to address larger social concerns like livelihood and education. Their awareness of sustainability
originates from the social benefits of their business. They have come to understand the
interdependence (as against independence) of their stakeholders and this has encouraged their
simultaneous pursuit of a people, purpose and planet approach. For their organization to be truly
sustainable, they have to be distinctive in a few areas, while being good at most activities that
they do. They believe that their strategy of “Leveraging industry-leading science & technology,
product offering, and customer service with execution excellence to provide affordable and
innovative medicines for healthier lives” will help them focus on the right areas. In practicing
sustainability, their initial efforts were focused on environment management and safety & health
at the workplace. As their organization evolved, so has been their sustainability thinking. Today,
while considering issues that are of significance to their stakeholders as well as to the
organization, they have arrived at a robust sustainability framework with six key focus areas–
Providing affordable and innovative medicines, being an employer of choice, environmental
management and climate change, caring for communities, sustainable sourcing and product
responsibility.

 PROVIDING AFFORDABLE AND INNOVATIVE MEDICINES

At Dr. Reddy’s, a company with a significant global footprint, they have a serious
responsibility – to help reduce the burden of disease on individuals and on the world.
They achieve this by leveraging their proficiency in science and technology to innovate at
every stage of their processes. Their Pharmaceutical Services and Active Ingredients
(PSAI) and Global Generics businesses focus on affordability by providing lower cost,
high quality alternatives while their Proprietary Products business addresses unmet and
poorly met medical needs.
 ENVIRONMENTAL MANAGEMENT & CLIMATE CHANGE
They are working towards maintaining a harmonious relationship with the environment,
which calls upon them to engage ethically with their stakeholders and to do everything in
their power to reduce their ecological footprint. Their mandate now, is ‘every new
product should have a sensible footprint’. Efforts are on to achieve a suitable blend of
energy conservation, use of renewable sources of energy, water conservation, control on
generation, disposal of hazardous waste and green chemistry.

 BEING AN EMPLOYER OF CHOICE

They believe collaboration and teamwork enhances performance and drives innovation.
They work as One Team, collectively ideating, innovating and interacting. At Dr.
Reddy’s, they offer a conducive working environment that taps one’s potential to the
fullest while offering them the freedom to question, innovate and find that ‘better way’.
This has gone a long way in earning them the trust of their employees and in making their
employees proud to work with them.
 PRODUCT RESPONSIBILITY
The trust of patients and doctors is crucial to their business. They ensure there is ‘No
scope for error in anything they do’ by addressing quality management, regulatory
compliance, product safety requirements and putting in stringent procedures for
packaging to protect patient safety. They are adopting a Quality by Design (QbD)
approach where it is no longer enough to do a quality check at the end of the process.
Their aim is to ensure that every step in their process is done ‘first time right’.

 SUSTAINABLE SOURCING
Their Business Partners are important stakeholders and working with them provides them
operational flexibility and cost advantage. However, they are the ones responsible for
social, economic and environmental impacts of their entire value chain. Through
sustainable sourcing, they try to influence them to adhere to best practices in human
rights, ethics, health & safety, environment and other related management systems. Their
mantra has been ‘nurture them, and let them grow’, as ultimately their growth is linked to
theirs.
  CARING FOR COMMUNITIES
‘To progress and provide for the community around them’ and ‘to benefit individuals and
society at large’ are their focus areas in sustainable community development. Caring for
communities is a part of their values statement. They channel their wide network of
social activities through Dr. Reddy’s Foundation (DRF), address health education needs
and patient care activities through Dr. Reddy’s Foundation for Heath Education
(DRFHE) and create positive impact on communities through Corporate Social
Responsibility (CSR) teams in each location.

Strategy

The Company’s strategy is to combine industry leading science and technology, product offering
and customer service with execution excellence to provide affordable and innovative medicines
for healthier lives. The key elements of Dr. Reddy’s strategy include:

 STRENGTHENING OF SCIENCE AND TECHNOLOGY

 The Company’s strengths in science and technology range from synthetic organic
chemistry, formulation development, biologics development to small molecule based
drug discovery. Such expertise enables the creation of unique competitive advantages
with an industry leading Intellectual Property (IP) and technology leveraged product
portfolio.

 OFFERINGS

Global Generics
Geographic diversification, cost containment, strengthening the product portfolio and
building scale – at Dr. Reddy’s are strong in all these aspects in the generics space. They
are now the fourth largest player in Germany after the acquisition of betapharm, and are
constantly looking for opportunities to maximize the potential of current and future
portfolio in different territories across the US and EU. They have the necessary expertise
for customer-specific packaging, compliance packaging, and anti-counterfeit packaging

 Branded Generics- The Company seeks to have a portfolio that is strongly

differentiated and offers compelling advantages to doctors and patients.

 Dr. Reddy’s brands are today recognized and trusted across several continents. Brands
like Omez (Omeprazole), Nise (Nimesulide), Stamlo (Amlodipine), Ciprolet
(Ciprofloxacin), Enam (Enalapril) and Ketorol (Ketorolac) are leaders in their category
in several countries, with many of them being used by more patients than use the
innovator’s product. Over 1.5 million patients across the world take ‘Omez’ for their
acid peptic disorders every single day! Entrepreneurship, coupled with the will to make a
difference drives 2,000-strong field force to reach out to over 210,000 doctors and
115,000 pharmacies in more than 40 countries across the world

 Unbranded Generics- It aims to ensure that its customers —pharmacy chains

and distributors — are ‘first to market’ the Company’s products; and that they
have high product availability combined with low inventories resulting in
superior inventory turns while addressing the customer’s needs. Vertical
integration and process innovation ensures that the Company’s products
remain competitive.

PSAI

PSAI (Pharmaceuticals Services and Active Ingredients) business, which comprises the Active
Pharmaceutical Ingredients (API) and Custom Pharmaceutical Services (CPS)businesses, we
offer Intellectual Property advantaged, speedy product development and cost-effective
manufacturing services to our customers - both generic companies and innovators.

Active pharmaceutical ingredients:

 Dr. Reddy's offers an unparalleled portfolio to their clients, who include innovators and
generic formulators worldwide. With a strong product portfolio of more than 140 products,
including niches like oncology and hormones, and their “first in, last out” approach, it is little
wonder that they are today the third ranked API player globally. Our goal is always to enable
our customers to be the first to launch a generic product and to provide value added services
to help them remain competitive and profitable for the entire life cycle of the product. We
have built the capabilities to consistently deliver on this promise in scale and across the
largest product range.
A highly skilled global team focuses on timely delivery of products, product development,
technology leadership, cost competitiveness, the highest levels of customer service, and full
compliance with regulatory and quality requirements.
Dr. Reddy's API business is supported by their technologically advanced Product
Development infrastructure, which identifies new products and is engaged every step of the
way, from the conceptual stage to delivery of drugs to the market place. The Product Delivery
Teams, the Centre’s of Excellence and IP teams help create value through Intellectual
Property and proactive patenting; early development work on certain promising molecules;
breakthrough product delivery; and by delivering cost leadership in API.
CUSTOM PHARMACEUTICAL SERVICES:

In an industry cluttered with chemical manufacturers, CPS stands out because of understanding
of the pharmaceutical business and the associated expertise needed. Rather than just being a
chemical provider, CPS offers a service mix covering the entire pharmaceutical value chain.

They execute cost-effective and time-bound projects for customers, and provide them with
cGMP-compliant products manufactured in FDA-inspected, ISO-certified facilities. A team of
experienced project managers ensures smooth progress of projects from initiation to closure in
order to avoid any cost and time overruns.

Proprietary Products
Dr.Reddy’s Specialty Pharmaceuticals business deals with assets like acquired proprietary technologies,
internally developed proprietary drug-delivery platforms, and current internal compounds under pre-
clinical and clinical development. Their initial global therapeutic area focus is on dermatology and
oncology, two therapeutic areas that best leverage their internal assets. A key component of the
strategy in this area is a strong, targeted business development effort to accelerate market entry.

 Differentiated Formulations- The Company’s emerging Differentiated

Products portfolio, which comprises of new, synergistic combinations as well
as technologies that improve safety and / or efficacy by modifying
pharmacokinetics of existing medicines, is focused on significant clinically
unmet needs. The Company is also investigating new indications for existing
medicines.
 New Chemical Entities (NCEs)- The Company is also focused in the
discovery, development, and commercialization of novel small molecule
 agents in therapeutic areas of bacterial infections, metabolic disorders, and
pain / inflammation.
 Generic Biopharmaceuticals-The Company aims to deliver equivalents of
proprietary biopharmaceuticals as affordable alternatives through process
development as well as relevant clinical research.

Strategic positioning: SWOT analysis

STRENGHTS

 Wholly owned subsidiaries in US and Europe

 Joint ventures in China and South Africa
 Markets pharmaceutical products in 115 countries
 Partnerships with global pharmaceutical companies like Novartis, NOVO Nordisk, etc.
 Strong product portfolio
 Manufacture and market over 250 medicines targeting a wide range of therapies
 Wide range of anti-cancer drugs developed
 Over 100 APIs developed
 Six New Chemical Entities
 Low cost base contributes to company’s high profit margin of around 34% of sales
 Partnerships with key players in the market keeps its cost base down
 Research Driven & Global Talent
 Expertise in developing innovative product formulations
 6120 employees worldwide including 951 scientists in which 323 are dedicated towards
new drug discovery research
.
WEAKNESSES:

 High amount of revenues from overseas

 India - a rich source of Active Pharmaceutical Ingredients (APIs), hence major source of
revenue is exports of APIs. May loose out to western world, especially Europe, where
currency is much more stable than the Indian Rupee
 Over-reliance on partnerships
 In order to compete effectively in global markets, strategic partnerships required to
develop products.
 Lack of resources similar to US and Europe based competitors to develop a drug to
marketing stage
 Generic drugs smallest focus
  Smallest portion of revenues from generics at around 20%
 Lack of patent legislation in India harms sales of its products
.
OPPORTUNITIES:

 In global generics segment, the US generic business is expected to deliver stronger

performance with at least one ‘limited competition’ product opportunity expected to
come up each year. The company is expected to see growth in sales due to
implementation of replenishment based supply chain model. In biologics, the niche
segment of Indian business the company is planning to launch new products.

 Product Portfolio: The group’s major product lines include antibiotics, pain relievers,
ulcer medicines, antidepressants and cardiovascular drugs, that are all well-suited to
Western and middle-income markets. Dr Reddy’s does not produce a significant ARV
portfolio, and in this sense lags behind Indian rivals such as Ranbaxy, Cipla and Matrix.

THREATS:

 Health care reforms across the globe.

 Germany’s tender model
 US healthcare reforms in the biologics space
 Russia reference pricing
 Price controls in India
 Regulatory and compliance (i.e. rising audit burdens, inspections and fines Proprietary
products
 Generics
 Foreign exchange fluctuations
 Launch at risk