Dr. Reddy’s Laboratories, a leading pharmaceutical company, is gearing up to face challenges in the US market, particularly in the fourth quarter of the current fiscal year. The company’s Chairman, K Satish Reddy, and Co-Chairman and Managing Director, GV Prasad, have informed investors that one of their key products in the US will face increased competition starting February 2026, leading to an anticipated decline in sales and profits. To mitigate this impact, the company is adopting a dual-track approach, focusing on strengthening its core businesses, such as active pharmaceutical ingredients (API), generics, branded generics, biosimilars, and over-the-counter (OTC) products, while also investing in future growth areas.
The company has been expanding its presence through acquisitions and partnerships across key markets. For instance, it acquired Nicotinell and other leading Nicotine Replacement Therapy (NRT) brands, expanding its footprint in Europe and beyond. Additionally, it entered into a nutrition venture with Nestle in India and received US rights for Cyclophosphamide from Ingenus. Dr. Reddy’s has also launched new products, including Galvus (anti-diabetes) in Russia and Toripalimab (immuno-oncology) and Elobixibat (chronic constipation treatment) in India.
To drive innovation and growth, the company has in-licensed Vonoprazan (GI drug from Takeda) and partnered with Sanofi to bring Beyfortus (Respiratory Syncytial Virus (RSV) treatment) to market. It has also collaborated with Gilead Sciences to bring HIV drug Lenacapavir to low- and lower-middle-income nations. Furthermore, Dr. Reddy’s has opened a cutting-edge biologics contract development and manufacturing organization (CDMO) facility in Genome Valley and secured approvals for several promising oncology assets.
Despite the anticipated challenges, Dr. Reddy’s has delivered double-digit top-line growth in FY25, with all markets contributing, including the US, Europe, Emerging Markets, India, and PSAI. The company’s EBITDA margin stood at 28.3%, and its return on capital employed (ROCE) reached about 28% for the full fiscal. The company’s leadership believes that these initiatives are in line with its strategy to address issues of availability and accessibility of affordable innovation through in-house and collaborative efforts. Overall, Dr. Reddy’s is well-positioned to navigate the challenges ahead and continue to drive growth and innovation in the pharmaceutical industry.