Dr. Reddy's Laboratories
) reported third quarter fiscal 2013 earnings per American
Depositary Share (ADS) of 40 cents, well below the Zacks
Consensus Estimate of 55 cents and the year-ago earnings of 50
cents per ADS.
The company reported revenues of $522 million during the
quarter, reflecting a year-over-year increase of 3%. Revenues
during the quarter were well below the Zacks Consensus Estimate
of $613 million.
Dr. Reddy's had received a one-time benefit from the launch of
generic olanzapine in the third quarter of fiscal year 2012 worth
$99 million. Normalizing this effect, revenues were up 23% year
Dr. Reddy's launched 17 new products, filed 13 registrations
for new products and also filed 13 drug master files (DMFs)
All growth rates mentioned below are excluding the impact of
the olanzapine profit share recorded in third quarter fiscal
Quarter in Detail
Dr. Reddy's reports revenues under three segments - Global
Generics, Pharmaceutical Services & Active Ingredients (PSAI)
and Proprietary Products and Others. Revenues at the Global
Generics segment were up 24% year over year to $380 million.
Strong sales in North America and the market territories were
primarily responsible for the growth displayed by the Global
Generics revenue increased in North America (up 38%), Russia and
other CIS (Commonwealth of Independent States) markets (up 32%),
India (up 12%) and the rest of the world/RoW (up 42%).
However, generic revenues declined 20% in Europe.
Revenues in the PSAI climbed 28% to $130 million during the
Gross profit margin at Dr. Reddy's was 53%. Selling, general and
administration (SG&A) expenses amounted to $156 million,
reflecting an increase of 12%. Research and development (R&D)
expenses increased 34% to $37 million.
During the quarter, Dr. Reddy's launched 8 new generic products
and filed 4 abbreviated new drug applications (ANDAs) with the US
Food and Drug Administration (FDA). The company has 65 ANDAs
pending approval with the FDA, of which 35 are Para IV filings
and 8 are first-to-file.
In the second quarter of fiscal 2013, the company had announced
its intention to acquire Netherlands-based specialty
pharmaceutical company, OctoPlus B.V. The deal is already under
progress with 92.9% shares tendered in Dr. Reddy's favor.
We are pleased with Dr. Reddy's geographic reach and product
depth along with a robust generic product pipeline. However, the
company's performance in Europe remains a concern.
The stock carries a Zacks Rank #2 (Buy). Another generic
) also carries a Zacks Rank #2. Currently,
) look more attractive with a Zacks Rank #1 (Strong Buy).
CAMBREX CORP (CBM): Free Stock Analysis
MYLAN INC (MYL): Free Stock Analysis Report
DOCTOR REDDYS (RDY): Free Stock Analysis
VALEANT PHARMA (VRX): Free Stock Analysis
To read this article on Zacks.com click here.