Dr Reddy's ups R&D spend 41% in FY04

Pharmaceuticals major Dr Reddy's Laboratories has raised its spending on research and development (R&D) by 41 per cent to Rs 199.2 crore in 2003-04 from Rs 141.3 crore in the preceding year.

Currently, the R&D spend comprises 10 per cent of the drug major's revenues. The company, which is one of the highest R&D spenders in the industry, is planning to increase the expenditure this year too to 12 per cent of the revenues.

In discovery research, which involves basic research and new drug discovery, the company increased the spending by 52 per cent from Rs 48 crore in 2002-03 to Rs 72.9 crore in 2003-04. This segment accounted for 37 per cent of Dr Reddy's total R&D expenditure.

"Our strategy on investments in R&D is in line with our vision to become a discovery-led global organisation. This would mean the company having its own discovery pipeline and future revenues coming from our own new chemical entities (NCEs)," said a company spokesperson.

"Our first NCE is expected to be commercialised in 2008-09, and thereafter we will have one NCE every two years." Dr Reddy's currently has eight molecules in its development pipeline in pre-clinical and clinical stages.

These molecules cover therapeutic areas such as cancer, metabolic disorder, cardiovascular diseases and bacterial infection.

The company's earlier strategy was to licence out a molecule at an early stage of development. But now it has decided to guide its promising molecules up to phase-II clinical trials and then pursue licensing opportunities. According to the company, the move helps in building in-house drug development capabilities and also enhances the value of its NCEs.

Dr Reddy's NCE pipeline has three cancer compounds: DRF 1042 (topoisomerase inhibitor), in phase-II trials in India; DRF 1644 (topoisomerase-I inhibitor), in phase-I trials in India and; DRF 5265, in preclinical stage.

It also has three metabolic disorder compounds: DRF 11605, in preclinical stage, DRF 10945 (for treatment of dislipidemia), in phase I trial in Canada; and DRF 2593 (insulin sensitizer), which is licensed to Novo Nordisk and has completed phase II trials.

Its compounds for cardiovascular diseases and bacterial infections "" RUS 3108 and DRF 13792 respectively "" are in preclinical stages.