Swot Ppt on Dr Reddy's

8/8/2019 Swot Ppt on Dr Reddy's

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PIONEER INSTITUTE OF

PROFESSIONAL STUDIESSWOT ANALYSIS

ON

GUIDED BY PROF. Nihit Jaiswal

PRESENTED BY Deepraj Jain

MBA III R


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Vision

Companys vision is to help people lead healthierlives. Company strive to do this by improving the

accessibility and affordability of existing healthcare,and by finding assures to unmet medical needs.

Mission

The Dr. Reddy'smissionistwo-fold:toprovide

patientsaccesstohigh-qualitygenericmedicinesataffordableprices,andtodevelopnewtreatmentsthatsatisfyunmetmedicalneedsthatareimprovementsovercurrentlyexistingtherapies.


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Purpose of the Company

AffordabilityThehighcostofmanymedicinesputsthemoutofthereachofmillionsofpeoplewhodesperatelyneedthem. Asaglobalpharmaceuticalcompany,companytakeveryseriouslycompanysresponsibilitytohelpalleviatetheburdenofdiseaseonindividualsandontheworld. Throughcompanys Global Genericsbusiness,

companyprovidehighquality,lousr-costalternativestoinnovatordrugs.Companyswiderangeofgenericmedicinesbringhopeandhealthtopeoplearoundtheglobe.

InnovationDespitethegreatadvancesofmedicalscience,therearestillfartoomanydiseasesforwhichtherearenocuresornosatisfactorytreatments.Companybelievethatinnovation inresearch,processesandtechnologies holdsthekeytofindingsolutionsforunmetorinadequatelymetmedicalneeds.CompanysProprietary Productsbusinessisdedicatedtodiscoveringneworbettertreatmentsthancurrentlyexist. Inaddition,companysCustom Pharmaceutical Servicesbusinessworkswith Innovatorcompaniesandemergingbiotechfirmstoacceleratethedevelopmentofnewmolecules,whilelouringresearchcosts.


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Promoters

Dr. K. Anji Reddy

Chairman

G V Prasad

Vice Chairman and

Chief Executive Officer

Satish Reddy

Managing Director & Chief

Operating Officer


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Products & Services

1. Active Pharmaceutical Ingredients (API): Dr. Reddy's Laboratories product list span 24 major chemistries including stereo-

selective synthesis, cryogenics, hydrogenations and carnations.

Dr. Reddy's offers an unparalleled portfolio to companys customers, who includeinnovators and generic formulators worldwide. With a strong product portfolio of more

than 140 products, including niches like oncology and hormones,

Companys operations capabilities are among companys core strengths, with six USFDAapproved plants in India, one in Mexico and companys latest addition, a 100USFDAinspected plant in Mirfield, UK, having a total capacity of 3300KL.

Companys API business is supported by companys technologically advanced ProductDevelopment infrastructure, which identifies new products and is engaged every step ofthe way, from the conceptual stage to delivery of drugs to the market place.

US DMF 139

Canadian PMF 54

European DMF 81

CEPs 22


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Products & Services

2. Custom Pharmaceutical Services:

Companys Custom Pharmaceutical Services (CPS) business serves severalinnovators, both Big Pharma and emerging biotech, and a large number of

emerging Pharma companies. Within a short span, company have become the

largest CPS player from India and a partner-of-choice to innovators, offeringtop-end technical expertise, tailor-made pharma solutions and a track record of

bringing innovations to the market quickly, efficiently and economically.

3. Global Generic:

Branded Generics

Companys Branded Generics portfolio offers over 200 products in themajor therapeutic areas of gastro-intestinal, cardiovascular, pain

management, oncology, anti-infectives, paediatrics and dermatology.

Brands like Omez, Ciprolet, Nise, Enam, Ketorol, Exifine and Cetrine

enjoy leadership positions in several key markets, including India,

Romania, Venezuela, Russia & the CIS countries.


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Products & Services

Unbranded GenericsIn the unbranded generics space, company have capitalized on every

opportunity to bring companys high-quality products to more people around

the world. A synchronized supply chain that leverages companys strong

product development capabilities, state-of-the-art manufacturing and verticalintegration with companys own APIs has created a creditable track record of

successful Day 1 launches, with significant market shares in all companys

key markets. Companys transparent and strong relationships with pharmacy

chains, insurance funds and other distributor networks help company deliver

upon companys promise to customers and patients globally.


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Products & Services

4. Generic Biopharmaceuticals

Grafeel (Filgrastim) was the first biologics product by Dr. Reddy's to enter themarket. The company's second product Reditux (Rituximab) is the first biosimilarmonoclonal antibody to be developed and launched anywhere in the world.Biologics, or biopharmaceuticals, are protein therapeutics drugs that are producedcompanying recombinant DNA technology.

REDITUX

Reditux is the Dr. Reddys brand of rituximab, a chimeric murine/human anti-CD20 monoclonal antibody (MAb), and is the world's first biosimilar monoclonalantibody. Reditux is companyed in the treatment of Non-Hodgkins Lymphoma,which is a group of cancers arising from lymphocytes, a type of white blood cell.

GRAFEELGRAFEEL is one of the hemopoietic growth factors that stimulate the proliferationof neutrophils. Grafeel is produced by a strain of Escherichia coli bearing agenetically engineered plasmid that contains a human G-CSF gene. GRAFEELregulates the production, maturation, and function of cells of the neutrophillineage. GRAFEEL is companyed to treat cancer patients suffering from

chemotherapy induced neutropenia.


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Year/

Particular

2006 2007 2008 2009 2010

Operating

Margin(%)

15.82 35.08 17.42 18.95 24.76

Gross Profit

mar.(%)

10.26 31.55 12.58 14.11 19.70

Net Profit

Mar.(%)

10.08 29.01 13.57 13.20 18.48

Returnonnet

worth(%)

9.33 26.90 9.87 10.66 14.30

EarningperShare(Rs.)

13.79 74.23 28.27 33.32 50.11

Dividendpay

Out Ratio

0.4 0.05 0.13 0.18 0.22

COMPARISON TABLE OF

DIFFERENTRATIOS IN LAST 5 YEARS


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Years /

particulars

(millions)

2006 2007 2008 2009

PBDIT 3750 4993 7462 9231

DEPRECIATION 1113 1335 1620 1936

PBIT 2637 3658 5842 7295

PBT 2637 3658 5842 7295

PAT 2111 2176 4753 5609

NET PROFIT 2111 2176 4753 5609


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Bench Marking

PROCESS BENCHMARKING

Dr. Reddyfollowsthe Internationalstandardforbenchmarkingitsprocessbutitcanfollowthe

Pfizerprocesstodealintheotherdrugsandmedicines.

Pfizerfollowsleanmanufacturingandtotalqualitymanagementapproaches.

PERFORMANCE BENCHMARKING

Canadoptthe R&D performancebenchmarkingof GSK.

As GSK arethepioneerfornewmoleculedevelopment.

STRATEGIC BENCHMARKING

Canadoptthestrategiesof Elli-lilly. Inc.toincreaseitsglobalmarketshare

Elli-lillydoestheirmarketingonscientificdata.


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SWOTANALYSIS OFDRREDDYS

BUSINESS LEVEL STRATEGIES

To get the competitive advantage on its competitors Dr

Reddys follow the low price strategy and Differentiation

through innovation and affordable price.

CORPORATELEVEL STRATEGIES

Dr Reddys focus on Expansion strategy through Merger

and Acquisition, Diversification and also from VerticalIntegration.


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Product Lifecycle

Introduction and growth: Ruffy (Nalbofine HCL) injection

Maturity stage: Omez, Omez-D, Nise, Stamlo-T, Leon.

Decline: Clobutinol


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Porters Five Forces Model


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Potential Entrants: Mankind

Substitutes: Genericmolecules

Buyer: patients,hospitalpharmacy,chemistshop.

Industry Rivalry:Cipla, Ranbaxy,zuventus,ipca.


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BCG Matrix


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BCG Matrix

Star Omez

Omez-D

Nise

Stamlo-T

Leon

Mintop

Question mark Dermatology

Cash Cows Levodropropizine

Gastrointestinal (Rank #2) Cardiovascular

Pain

Oncology (Rank #2)

Diabetology

Dog Clobutinol


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Opportunities forIndian pharmaceutical

companies

The Indian pharmaceutical industry has a lot of strengths and hence ample ofopportunities. A few important strengths are mentioned below.

Competent workforce

India has a pool of personnel with high managerial and technical competence asskilled workforce. It has the largest English speaking population in the world.Professional services are easily available.

Cost-effective Chemical Synthesis

Its track record of development, particularly in the area of improved cost-beneficialchemical synthesis for various drug molecules is excellent. It provides a widevariety of bulk drugs and exports sophisticated bulk drugs.

Legal & Financial Framework

Corporate Catalyst India Indias Pharmaceutical Industry India has a 53 year olddemocracy and hence has a solid legal framework and strong financial markets.There is already an established international industry and business community.

Information & Technology

It has a good network of world-class educational institutions and establishedstrengths in Information Technology.


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Globalization

The country is committed to a free market economy and globalization. It has a 70 millionmiddle class market, which is continuously growing.

Low priced products

The industry has thrived so far on reverse engineering skills exploiting the lack of processpatent in the country. This has resulted in the Indian pharmaceutical players offering theirproducts at some of the lowest prices in the world.

Quality assurance

The quality of the products is reflected in the fact that India has the highest number ofmanufacturing plants approved by US FDA (61 plants), which is next only to that in the US.

Dominance in the market

Multinational companies have traditionally dominated the industry, which is another trendseeing a reversal. Currently, it is the Indian companies which are dominating themarketplace with the local players dominating a number of key therapeutic segments.

Self-reliance

Displayed by the production of 70 per cent of bulk drugs and almost the entire requirementof formulations within the country.


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Other Strengths

Low cost of production, Low R&D costs, Innovative Scientific manpower andIncreasing balance of trade in Pharma sector are also significant strengths of the

Indian pharmaceutical industry. R&D

Corporate Catalyst India Indias Pharmaceutical Industry Both the Indian centraland state governments have recognized R&D as an important driver in the growthof their pharma businesses and conferred tax deductions for expenses related toresearch and development.

ClinicalResearch- India, Most Significant EmergingGeography

Indian clinical research industry is estimated at overUS$ 100 million. It complieswith ICHGCP protocols. It is a growing body of trained and experiencedinvestigators. India is expected to capture about 10 per cent of the global clinical

research market by 2010.

Labor force

With one of the largest and most genetically diverse populations in any singlecountry, India can recruit for clinical trials more quickly and perform them morecheaply than countries in the West.


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The IndianGenerics market

The Indian generics market is witnessing rapid growth opening up immense opportunities

for firms. This is further triggered by the fact that generics worth over$40 billion are goingoff patent in the coming few years which is close to 15 per cent of the total prescription

market of the US. The Indian pharmaceutical companies have been doing extremely well indeveloped markets such as US and Europe, notable among these being Ranbaxy, Dr.Reddy's Labs, Wockhardt, Cipla, Nicholas Piramal and Lupin.

Smaller bio tech firms

With pharmaceutical companies struggling to maintain R&D productivity, biotechnologycompanies present opportunities to enhance product pipelines. Increasing convergence of

the pharmaceutical and biotechnology sectors was observed during 2004. The demand for

biopharmaceuticals is encouraging pharmaceutical companies to invest in smaller biotech

firms.

Ageing and obese population

Healthcare needs will increase and drugs will be used for longer. For instance, an ageing

global population is poised to drive pharmaceutical drugs for indications such as

Alzheimers disease. Drugs that address rising multifactorial disorders such as cancer as

well as lifestyle disorders such as obesity are also likely to experience strong revenue

growth.


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SWOTANALYSIS

STRENGTHS

Itisoneofthebiggestlaboratoriesintermsofthenumberofscientists

Whollyownedsubsidiariesin US and Europe

JointventuresinChinaand South Africa

Marketspharmaceuticalproductsin 115 countries

Partnershipswithglobalpharmaceuticalcompanieslike Novartis, NOVO Nordisk,etc. Strongproductportfolio

Manufactureandmarketover 250 medicinestargetingawiderangeoftherapies

Widerangeofanti-cancerdrugsdeveloped

Over 100 APIsdeveloped

Six NewChemical Entities(NCE)

Lowcostbase

Contributestocompanyshighprofitmarginofaround 34% ofsales

A partnershipwithkeyplayersinthemarketkeepsitscostbasedown

Research Driven & Global Talent

Expertiseindevelopinginnovativeproductformulations

6120 employeesworldwideincluding 951 scientistsinwhich 323 arededicatedtowardsnewdrugdiscoveryresearch


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Strengths

Dr. Reddyshasthreeestablished R&D centers thatfocusonthedevelopmentofgenerics,

noveldrugdeliverysystems(NDDS) andnewdrugdiscoveryresearch(NDDR) inarangeofresearchfields.

Dr. Reddyshasfurtherexpandeditscapabilitiesthroughorganicgrowth,thecompanyhas

alsotakenanactivepartinexpandingitsgeographicpresencethrough M&A.

Dr. Reddyssellsandmarketsitsproductsinmorethan 100 countries,withanestablished

presenceinthe US, Germanyand Russia.

Dr ReddysalsolaunchedasocialinitiativecalledSparsh, anassistanceprogramforcancer

patients whocannotaffordatreatment. Patientsidentifiedbythedoctorsthrough Sparsh are

provided Reditux, theanticancerbiologicdrugfrom Dr Reddys Labsfreeofcost.

Internationalpresencewithanactivepresenceacrossthepharmaceuticalvaluechaininthedevelopmentandmanufacturingofgenericandbrandedpharmaceuticalsandbulk

pharmaceuticalingredients.

Highbrandvaluee.g. NICE tablet.


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Weakness

Highamountofrevenuesfromoverseas

India- arichsourceof Active Pharmaceutical Ingredients(APIs),hencemajorsourceofrevenue

isexportsof APIs. Maylooseouttowesternworld,especially Europe,wherecurrencyismuch

morestablethanthe Indian Rupee

Over-relianceonpartnerships

Inordertocompeteeffectivelyinglobalmarkets,strategicpartnershipsrequiredtodevelop

products.

Lackofresourcessimilarto US and Europebasedcompetitorstodevelopadrugtomarketing

stage

Genericdrugssmallestfocus.

Smallestportionofrevenuesfromgenericsataround 20%

Lackofpatentlegislationin Indiaharmssalesofitsproducts

Political Risk

Itsmarketingisnotbasedonscientificdatalike Elli-lilly .


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Opportunities

Takeadrugallthewaytomarket

Takeamoleculefromitspipelineallthewaytothemarketplacecost-effectivelymarket

Buybackoftheintegrateddrugdevelopmentcompanyfrom ICICI VenturesandCitigroup

Domestic Genericdrugsmarket

Inanother 4-6years,manyproductpatentsobtainedafterthe 2004 legislationwillgooffprovidinganopportunitytothecompanyincreaseitsdomesticfootprintin Generics.

RDY beingamuchsmallergenericcompany($3 billionestimatedinfiscal 2012) comparedtoa

companylikeTeva (TEVA) ($14 billion sales), itcaneasilygrowat 20% rateformanymore

years

Basedonfiscal 2012 earningsof $414 million($2.48 pershare) RDY'ssharevaluewouldbe

$50.

Increasedfreecashflowwouldleadtoincreasedinvestment/acquisitioninmorespecialone

timegenericopportunities

Dr. Reddy'shighvalue US genericopportunitiesinthenext 3 yearshasthepotentialtobringin

asmuchas $1 billion.


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Threats

Needstogain FDA approvalforallsourcesandproducts

Productshavetopassstrict FDA trialsbeforegoingtomarket,whichcanbecostlyandtime

consuming

Thismaydelaythecompanyentrytoparticularmarketswhichaffectsrevenue

Competitionfrom US and EuropeanCompanies Basedinlucrativemarketse.g. Novartis, Merck & Co

Revenuesrunningintobillionswhichdwarfs Reddysannualturnover Litigationcharges

Reddyslostthecaseagainst Pfizerfortheuseofgenericformof Norvasc drug. Legalcost

$10mandalsolossofmarketopportunity.

Heightenedconcernsaboutprofitabilityof Germangenericsbusinessof Betapharm GrowingcompetitionfromChina

Competitionfrom Indiancompanieswithinthedomesticmarket

Morepotentialnewdrugsandmoreefficienttherapies.

Rapidlychangingstandardsofqualityandmanufacturingattheinternationallevel.


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Thank You

A Prayer Of Two Words

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Swot Ppt on Dr Reddy's