Dr Reddy's Laboratories is planning to set up a global marketing organisation to take its products directly to the market, according to the company's latest annual report.
The company believes that its vertical integration capabilities -- starting from discovery research & development to process chemistry, active pharmaceutical ingredients(APIs) production, custom chemical synthesis and finally the development and manufacturing of dosage forms -- will help the initiative succeed.
"We have six multi-tonne bulk drug manufacturing facilities with US FDA approvals and the capability to produce quantities that range from milligrams to metric tonnes. We aim to be forerunners in the supply of generic alternatives, using novel and non-infrionging routes," a company source said.
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The custom chemical synthesis business is likely to make its maiden contribution in the current fiscal. The division, one among the eight strategic business units (SBUs) formed by the company last year, caters to process research, chemical development, chemical synthesis and contract manufacturing needs of global pharmaceutical companies who wish to outsource their requirements.
The strategy of this division is to be the preferred partner for innovator companies for their chemical outsourcing needs.
On generic formulations business, Dr Reddy's feels that the competitive nature of the regulated markets, such as US and Europe, requires an aggressive marketing strategy.
"We plan to enter into marketing agreements with leading pharmaceutical companies in various countries. Our 100 per cent export-oriented facility has been inspected and approved by regulatory bodies such as US FDA, UK MCA, MCC (South Africa), TGA (Australia) and TPP (Canada)," the source said.
With all these initiatives, Dr Reddy's domestic-export mix is expected to be skewed more in favour of exports in the current fiscal. During 2000-01, sales outside India contributed 49 per cent of the net revenues. In the first quarter of current fiscal, the same has gone up to the level of 54 per cent of the total revenues.
Explaining the difference in net profit between the Indian and US Gaap accounts, the company said: "It is primarily on account of non-cash expenses such as depreciation & amortisation, difference in the treatment of R&D expenses and consolidation of subsidiary accounts."
It may be recalled that the company had reported a net profit of Rs 74.19 crore as per US Gaap compared to a net profit of Rs 144.47 as per Indian Gaap accounts for 2000-01, a difference of Rs 70 crore.
Similarly, for the first quarter of current fiscal, the company's net profit as per US Gaap stood at Rs 44 crore against Rs 53.5 crore, a difference of Rs 9.5 crore. The reasons for the difference is similar to that of 2000-01.