Dr Reddy's aims to grow Europe business, looks for acquisitions

Currently, Europe contributes only 4% of the revenue

Dr Reddy's Laboratories will expand in Europe and grow its proprietary products business over the next two years. The company also says it is looking at growth through mergers and acquisitions. America is its biggest market, about 45 per cent of revenue. Russia is the second biggest market abroad. In the US, pharmaceutical companies face competitive pressures and regulatory challenges. Business in Russia is impacted by currency value fluctuation.

Europe (Russia is excluded) contributes only four per cent of the revenue but Dr Reddy's plans to grow the share and is targeting France, Italy and Spain in the next two years. “We are seeing interesting opportunities in Europe and plan to expand there,” said co-chairman and chief executive officer G V Prasad on Wednesday.

At present, its proprietary products contribute three to four per cent of its revenue and it hopes to grow the share, expecting US Food & Drug Administration (FDA) approval for three products. Prasad said he expected the proprietary business to have a sizable share in the next three to four years. The company says it is positively viewing the FDA reorganisation and focus on drug quality. A new Office of Pharmaceutical Quality there is to integrate review of drug applications with the evaluation of manufacturing facilities. The regulator has also proposed a different guideline for evaluating pharma companies, based on risk and reward.

“This presents opportunities to the industry to strengthen systems and quality. It is a positive development,” Prasad added.