The drug is a generic equivalent of Merck's Proscar and used in treating enlarged prostates.

The stock witnessed a steady rally in the past. From Rs 1,220 on 19 July 2006, it surged to Rs 1,418.65 by 02 August 2006, on sustained buying interest. Most of the gains came on the back of strong Q1 June 2006 results declared from the company.

Dr Reddy's Laboratories reported 108.10% surge in net profit for the Q1 June 2006 to Rs 131.81 crore from Rs 63.34 crore in Q1 June 2005. Net sales rose 43.40% to Rs 768.50 crore (Rs 535.78 crore).

On 19 May 2006, Dr Reddy's Laboratories, through its wholly-owned subsidiary, Reddy Pharma Iberia, S.A., acquired marketing rights of the pharmaceutical specialties, marketing authorisation applications and a trademark along with physical inventories of the related products from Laboratories Litaphar, S.A. (Litaphar) for Rs 21.89 crore.

In June, the company launched the generic version of Merck's Proscar drug to treat enlarged prostates in the US. The Hyderabad-based Indian pharma major bought Betapharm for $572 million earlier this year. Last year, it bought Roche's active pharmaceutical ingredients business in Mexico for $59 million.

In the same year, to mitigate cost pressures, DRL entered into a partnership with ICICI Ventures for developing and commercialising abbreviated new drug applications for two years. Further, the company was also involved in a three-way tie-up (ICICI Ventures and Citigroup Ventures being the other two) to form Perlecan Pharma, to which four molecules from the DRL drug discovery pipeline will be transferred for clinical development. These initiatives have served the company address the cost-revenue mismatch as it helped the company bring down R&D costs.

Dr. Reddy'S Labs has set 29 August 2006 as the record date for the purpose of issue of 1:1 bonus shares.