CapitalMarket.com - Dr Reddy’s upbeat on readying new molecules for clinical trials
Hot Pursuit Thursday, September 21, 2006 12:42 Hrs IST

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Dr Reddy’s upbeat on readying new molecules for clinical trials

Dr. Reddy’s Laboratories rose 1.28%, to Rs 763.50, on media reports that it has lined up seven new chemical entities for clinical trials.

The stock rose sharply from a low of Rs 610 on 19 July, to Rs 747.47 on 18 August, only to slip to Rs 711.75, by 12 September. Here, the stock advanced to Rs 753.85, by 20 September 2006.

At the current market price of Rs 763.50, Dr. Reddy’s Laboratories trades at 11.36 times its Q1 June annualized consolidated EPS of Rs 67.20.

As per reports, Dr Reddy’s Lab has lined up seven new chemical entities in its drug discovery fold, and is hopeful of its most promising diabetes molecule DRF-2593 to enter the phase-III clinical trials soon. The company has entered into a co-development and commercialization deal with Rheoscience for DRF-2593. In terms of agreement, Rheoscience will fund all costs associated with the phase-III clinical trials. Dr Reddy’s to pay a pre-determined amount towards its share of the development costs. The arrangement allows Dr Reddy’s to have full rights for North America, Japan and the rest of the world, except Europe (excluding Russia and CIS) and China.

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.

The laboratories, through its wholly-owned subsidiary, Reddy Pharma Iberia, S.A., had in July 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.

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).

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