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Olanzapine drives Dr Reddy's business in third quarter

Generic version of Lilly’s Zyprexa adds almost $100m to revenues

Indian generics firm Dr Reddy's posted a 46 per cent increase in revenues to $522m in its fiscal third quarter

This was primarily due to the launch of a generic version of Eli Lilly's schizophrenia drug Zyprexa (olanzapine) in the US with first-to-file exclusivity.

In total, olanzapine added $99m to the quarter's revenues, which along with favourable exchange rates helped Dr Reddy's post an 88 per cent hike in net profit to $105m.

Dr Reddy's is collaborating with Teva on sales of olanzapine in the US, and is claiming 45 per cent market share ahead of the launch of additional generic competitors in the coming months.

Chief executive Gunupati Venkateswara Prasad said on a conference call that Dr Reddy's has a crop of other launches coming up in the US market in the next six months which will "fuel our growth for the next fiscal year".

These include generic versions of Pfizer's cholesterol drug Lipitor (atorvastatin) and antidepressant Geodon (ziprasidone).

Dr Reddy's is also starting to build a portfolio of biosimilars in emerging markets - including arthritis treatment rituximab and filgrastim - which could add $100m in revenues in the next two to three years.

Generic revenues rose 57 per cent to $402m, while Dr Reddy's pharmaceutical services and active ingredients division grew 12 per cent to $105m.

While much of the growth in the generics business could be attributed to olanzapine, other big gainers include anticoagulant fondaparinux sodium, which has captured around 18 per cent market share from GlaxoSmithKline's Arixtra brand in the US since its launch there in July last year.

Dr Reddy's is still working to address some production bottlenecks for fondaparinux but says it expects to resolve these within the next three months. The generic is not expected to reach the European market until 2014 as patent protection is still in effect.

Other good performances were seen from gastrointestinal drug lansoprazole and an over-the-counter formulation of omeprazole, according to chief operating officer Kallam Satish Reddy.

6th February 2012

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