Good Health Can’t Wait.

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Good Health Can’t Wait. Dr. Reddy’s Laboratories Limited NORTH AMERICA GENERICS HIGHLIGHTS FY2015 ` 64.72 bn 12 NEW PRODUCTS LAUNCHED 13 HABITROL® 17% SALES Crossing US$ 1bn NEW PRODUCT FILINGS Cumulatively, 68 ANDAs awaiting approval from the USFDA: of which 43 Para IV applications, of which 13 possibly have ‘first-to-file’ status. The last three months of FY2015 saw OTC sales of Habitrol® — nicotine replacement therapy transdermal patches — which was acquired from Novartis Consumer Health Inc. in November 2014. Difficult economic and geopolitical situations in major emerging markets. Through the year, several pharmaceutical companies have been affected by such events, especially in Russia, Ukraine and Venezuela. In FY2015, Russia witnessed a very sharp depreciation of the rouble versus the US dollar which, in turn, negatively affected all imports including those of pharmaceutical products. Ukraine was hit by serious political and military conflict which created significant uncertainties and affected the market. Despite being an excellent market for pharmaceutical products, Venezuela’s mechanism of having multiple administered exchange rates and severe controls on dollar repatriations have constrained business in the country. USFDA inspections. Any importing country’s drug administrator has the right to, and duty of, periodically inspecting and certifying the manufacturing facilities of the exporting pharmaceutical companies. This fact is readily accepted by all. Over the last few years, such audits on Indian generics manufacturers have substantially increased in their number and frequency, especially those carried out by the USFDA. On occasions, the USFDA inspectors have noted several Form 483 observations — which, in their opinion, are possible infringements of established standards in manufacturing, testing, quality systems, data integrity and product safety. Some of these have led to import restrictions coupled with large financial penalties. Dr. Reddy’s welcomes such inspections. Equally, it believes that where such observations are relatively minor in nature — and are appropriately addressed by the audited company — the USFDA should resolve these outstanding issues as quickly as possible. Having said so, it is important to recognize that, despite following best-in-class good manufacturing practices (GMP) norms, there remain risks of adverse USFDA action —which, in turn, might delay the monetization of opportunities in the US. DR. REDDY’S MARKET PERFORMANCE FOR FY2015 This section starts with Table 1 which summarizes Dr. Reddy’s performance in different markets and product segments; and then goes on to describe matters in greater detail. NORTH AMERICA GENERICS North America remains an important growth engine for Dr. Reddy’s. Revenues from the region grew by 17% to ` 64.7 billion in FY2015 — thus crossing the US$ 1 billion mark.We are the 9th largest generics pharmaceutical company in the US. FY2015 was characterized by a strong wave of customer consolidation, which had a direct impact on all those who TABLE 1 DRL’S REVENUES, FY2015 VERSUS FY2014 (IN MILLION) FY2015 FY2014 RATE OF GROWTH, US$ ` AS A % US$ WW` AS A % FY2015 VS. FY2014 Global Generics 1,935 120,556 81% 1,688 105,164 80% 15% North America 64,723 54% 55,303 53% 17% Europe 7,193 6% 6,970 7% 3% India 17,870 15% 15,713 15% 14% Russia and CIS 17,713 15% 19,819 19% -11% Rest of the World (RoW) 13,057 11% 7,359 7% 77% PSAI 409 25,456 18% 385 23,974 18% 6% North America 4,605 18% 3,820 16% 21% Europe 10,507 41% 9,058 38% 16% India 3,288 13% 3,787 16% -13% Rest of the World (RoW) 7,056 28% 7,309 30% -3% Prop. Products and Others 35 2,177 1% 49 3,033 2% -28% Total 2,378 148,189 100% 2,121 132,170 100% 12% 46
Statutory Reports • Management Discussion and Analysis Annual Report 2014 - 15 RUSSIA & CIS GENERICS HIGHLIGHTS FY2015 ` 17.71 bn 11% SALES Largely due to the sharp depreciation of the Russian Rouble and Ukrainian Hryvnia. ` 14.92 bn REVENUE FROM RUSSIA 13% (rouble) 9% (INR) Despite macroeconomic uncertainties, revenue registered a growth of 13% in rouble and a decline of 9% in Indian Rupees after the currency depreciation. supplied generics to the US market. However, the Company’s business maintained its growth momentum on the back of: (i) Market share gains in some of the key molecules such as azacitadine, decitabine and atorvastatin. Of these, sales of the first two crossed US$ 100 million each. (ii) 12 new launches, including major products like Valganciclovir and Sirolimus. (iii) Consolidating/sustaining the market position of key injectables launched in FY2014. Our injectable franchise — comprising assets that have limited competition — continues to be a critical component, accounting for over a fourth of the total North America generics business. Dr. Reddy’s OTC portfolio is a significant component of the overall performance in the US. We are currently ranked 2nd in the store brand OTC space. This segment is poised for rapid growth in the coming years with increasing coverage and ‘prescription’ (Rx) to ‘OTC’ switches. Our store brand OTC offerings got strengthened with the acquisition of Habitrol® brand — an OTC nicotine replacement therapy transdermal patch — from Novartis Consumer Health Inc. Based on a consent order from the US Federal Trade Commission on 26 November 2014, Dr. Reddy’s has now formally acquired the title and rights of Habitrol® brand and the permission to market the product in the US. Thus, FY2015 includes revenues from Habitrol® for January-March 2015. RUSSIA AND CIS CY2014 saw a major slowdown in the volume growth of the Russian pharmaceutical market, on account of price controls and the slowdown of an economy that is heavily dependent on oil and gas export prices. According to the IMS, the market by volume grew by only 1%, one of the lowest in recent CHART E: VALUE AND VOLUME GROWTH IN RUSSIA, CY2013 AND CY2014 732 SALES VALUE (RUB BN) SALES VOLUME (PACKS BN) +1% +13% 495 502 650 441 12% 492 423 -0.4% 422 126 22% 154 14% 83 4% 87 0.63 -4% 0.72 2013 2014 2013 2014 RETAIL HOSPITAL REIMBURSEMENT INDICATOR RUB US$ EURO PACKS Value 2014 (bn) 732 19.2 14.5 5 Growth 2014 (%) 13% -6% -6% 1% 47
Page 1 and 2: ANNUAL REPORT 2014-15 Good Health C
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Notice Annual Report 2014 - 15 NOTI
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E-Voting Annual Report 2014 - 15 IN
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Dr. Reddy’s Laboratories Limited
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The future belongs, not to those wh
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