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Sonali Subhadarshini He who enjoys good health is rich..

Dr. Reddy's Lab - Business Model

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Page 1: Dr. Reddy's Lab - Business Model

Sonali Subhadarshini

He who enjoys good

health is rich..

Page 2: Dr. Reddy's Lab - Business Model

Mission & Vision

Mission :

To be India's first pharmaceutical that successfully takes its products from discovery to

commercial launch globally.

Vision :

To become a discovery ruled global pharmaceutical company with a core purpose of helping

people lead healthier lives.

Page 3: Dr. Reddy's Lab - Business Model

• Founded- 1984

• Key people- Anji Reddy (Founder)

G. V. Prasad (CEO)

Kallam Satish Reddy(Chairman)

• Headquarter- Hyderabad, Telangana, India

• Revenue- $2.3 billion (2014)

• Net income- $350 million (2014)

• Number of employees- 20000 (April 2015)

Company Profile

Page 4: Dr. Reddy's Lab - Business Model

Background

Produces and sells active pharmaceutical ingredients , finished dosages and biologics.

Manufactures ulcer medicines, antibiotics, pain relievers, antidepressants and cardiovascular drugs.

Markets its product in approximately 100 countries , focusing on Europe, India, US and Russia.

On 11 April 2001, Dr. Reddy’s became the first pharmaceutical company from Asia Pacific to be

listed on New York stock exchange.

Research and development in diabetes, cancer, cardiovascular diseases and bacterial infections.

Page 5: Dr. Reddy's Lab - Business Model

135 new generic products, filing of 107 new product registration, and 56 drug master files

Integrated global pharmaceutical company, committed to providing affordable and

innovative medicines for healthier lives.

Offers a portfolio of products and services including

• Active Pharmaceutical Ingredients (APIs)

• Custom Pharmaceutical Services (CPS)

• Generics

• Biosimilar

• Differentiated formulations

• New Chemical Entities (NCEs).

Background contd.

Page 6: Dr. Reddy's Lab - Business Model

Old logo

New logo

Page 7: Dr. Reddy's Lab - Business Model

Expansions & Acquisitions

Out-licensed a molecule for clinical trials to Novo Nordisk, a Danish pharmaceutical company in 1997

Acquisition of Benzex laboratories in 1988

Dr. Reddy’s research foundation (DRF) was established in 1993

Strengthened its Indian manufacturing operations by acquiring American Remedies Ltd. in 1999

Became the third largest pharmaceutical company in India

In December 2000, Reddy’s had undertook its first commercial launch of a generic product in the USA.

Became the first non-Japanese pharmaceutical company from the Asia-Pacific region to obtain a New

York Stock Exchange listing

Page 8: Dr. Reddy's Lab - Business Model

Merger with Cheminor Drugs in 2000 was a big leap, rose as the third largest

pharmaceutical company.

Acquisition of Betapharm in 2006 (US$ 570 millions)

(2007) Revenues reached US$1.5 billion and recognition as no 1 pharmaceutical company

in India in terms of turnover, rise to $1.7 billions by 2011

Joint venture with Fujifilm

Expansions & Acquisitions contd.

Page 9: Dr. Reddy's Lab - Business Model

DRL: The rise..

Quick rise in the pharmaceutical sector in the late 80s and early 90s.

Launch of new products ensured continued growth

Focus on R&D acted as a booster in growth and reputation

Acquisition of domestic and foreign companies were a major

milestone

Joint ventures, patents and licensing were contributing factors

Page 10: Dr. Reddy's Lab - Business Model

Patient litigations in the US market

Quality problems in Mexico unit

Falling revenues in key markets

String of fatal accidents

DRL: The fall..

Page 11: Dr. Reddy's Lab - Business Model

Australia

China

Germany

New Zealand

Romania

Russia & CIS

South Africa

United Kingdom

United States of America

Presence besides India

Page 12: Dr. Reddy's Lab - Business Model

There is no diet that will do what eating healthy does…

Page 13: Dr. Reddy's Lab - Business Model

Supplier Input

Process

Output

Customers

SIPOC model

Page 14: Dr. Reddy's Lab - Business Model

• National Securities Depository Ltd.

• Central Depository Services (I) Ltd.

• J P Morgan Chase Bank

• Bombay Stock Exchange

• National Stock Exchange

• New York Stock Exchange Inc

Supplier’s of capital…

Page 15: Dr. Reddy's Lab - Business Model

Some of the investors…• Kedar Upadhye

7-1-27, Ameerpet, Hyderabad - 500016. Telangana (India). Ph: +91 40 6683 4297 Email: [email protected]

• Ashish Girotra Ph: +1 609 375 9805 Email: [email protected]

• Saunak Savla Ph: +91-40-4900 2135 Email: [email protected]

Page 16: Dr. Reddy's Lab - Business Model

Inputs… (Raw Materials)

Page 17: Dr. Reddy's Lab - Business Model

Therapeutic areas

• Gastro-Intestinal

• Cardiovascular

• Pain Management

• Anti-Infective

• Dermatology

• Diabetology

• Nutraceuticals

• Oncology

• Respiratory

• Stomatologicals

• Urology

• Gynaecology

• Haematology

• Paediatric

• Central Nervous System

Page 18: Dr. Reddy's Lab - Business Model

PHARMA

BULK DRUGS (API)

CONTRACT RESEARCH FORMULATIONS

PATENTED GENERICS

GENERIC GENERICS

BRANDED GENERICS

Industry classification

Page 19: Dr. Reddy's Lab - Business Model

Product mix

GenericsAPIDifferentiated formulations

Biosimilar

NCE

Outputs…

Page 20: Dr. Reddy's Lab - Business Model

Products

Branded Generics API

CardiovascularValsartan Telmisartan RanolazineRamipril

CelecoxibKetorolacTromethamineNaproxen

RitonavirLopinavirFluconazoleAbacavir Base

AtocorBetaoneCardioprilStamlo

FinridHilinKetoroNise

RelentOxitClampCiprolet

Pain Management

Anti infective

Page 21: Dr. Reddy's Lab - Business Model

NCE Differentiated products

BiosimilarGrafeelRedituxCresp Peg grafeel

Bacterial InfectionsMetabolic DisordersPain and Inflammation

Promiseb™ Topical CreamScytera Foam Cloderm® Cream

Products contd.

Page 22: Dr. Reddy's Lab - Business Model

Distributor

Euphoria Healthcare Pvt LtdP D Doshi & CompanyKaivan Distributors

Dr Reddys Laboratories LtdBiodiesel TechnologiesMehta Medicare Pvt Ltd

Bio Square Life SciencesSrs EnterprisesSurya pharmaceuticals

Mumbai

Kolkata

Chennai

Page 23: Dr. Reddy's Lab - Business Model

ROW; 6; 6%

NORTH AMERICA, 45, 45%

EUROPE; 12; 12%

INDIA; 18; 18%

RUSSIA & CIS; 19; 19%

REVENUE DISTRIBUTION GEOGRAPHICAL MIX

ROW NORTH AMERICA EUROPE INDIA RUSSIA & CIS

Customers…

Page 24: Dr. Reddy's Lab - Business Model

Financial aspects

FY08 FY09 FY10 FY11 FY12 FY13 FY140

500

1000

1500

2000

2500

1241

1509 1481

1639

2019

2149

2300

FISCAL YEAR

REVE

NU

E IN

$ M

ILLI

ON

Page 25: Dr. Reddy's Lab - Business Model

Balance sheet

Page 26: Dr. Reddy's Lab - Business Model
Page 27: Dr. Reddy's Lab - Business Model

Applied R & D Basic R & D

Local Branding

Global Branding

CIPLA

Torrent

NOVO NORDISK

Glaxo Smithkline

SANOFI-AVENTIS

DR. REDDY’S LAB

RANBAXY

International Formulation

Domestic Formulation

Torrent

Cipla

Generics

Strategic groups in the Indian pharma industry

Page 28: Dr. Reddy's Lab - Business Model

Partnerships with key players in the market keeps its cost base down

Research Driven & Global

Take a drug all the way to marketTake a molecule from its pipeline all the way to the

market place cost-effectively marketIncrease domestic footprint in generics

Over-reliance on partnershipsLack of resources similar to US and Europe based

competitors to develop a drug to marketing

Needs to gain FDA approval for all sources and products

Products have to pass strict FDA trials before going to market, which can be costly and time consuming

Strength Weakness

Threat Opportunity

SWOT Analysis

Page 29: Dr. Reddy's Lab - Business Model