Profile: Dr. Reddy's Laboratories Limited (RDY)

Dr. Reddy’s Laboratories Limited (Dr. Reddy’s), incorporated on February 24, 1984, is a global pharmaceutical company. The Company operates in three segments: Pharmaceutical Services and Active Ingredients (PSAI), which includes active pharmaceutical ingredients and intermediaries, which are the principal ingredients for finished pharmaceutical products; Global Generics, which consists of finished pharmaceutical products ready for consumption by the patient, and Proprietary Products, which involves the discovery of new chemical entities for subsequent commercialization and out-licensing. Dr. Reddy’s is vertically integrated and uses its pharmaceutical ingredients and intermediates in its own finished dosage products. The Company conducts basic research mainly in the areas of metabolic disorders, cardiovascular diseases and bacterial infection. On July 30, 2008, it acquired 85.69% interest in Perlecan Pharma Private Limited (Perlecan Pharma). Subsequently Perlecan Pharma became a wholly owned subsidiary of the Company.

On April 28, 2008, the Company, through its wholly owned subsidiary, Dr. Reddy’s Laboratories (EU) Limited, acquired a unit of The Dow Chemical Company associated with its United Kingdom sites in Mirfield and Cambridge. On April 30, 2008, the Company acquired BASF Corporation’s pharmaceutical contract manufacturing business. On April 30, 2008, the Company acquired Jet Generici Srl.

Pharmaceutical Services and Active Ingredients Segment

The PSAI segment includes active pharmaceutical ingredients, also known as active pharmaceutical products or bulk drugs, which are the principal ingredients for finished pharmaceutical products. Intermediates are the compounds, from which active pharmaceutical ingredients are prepared. This segment also includes contract research services and the manufacture and sale of (active pharmaceutical ingredients and intermediates) API and steroids in accordance with the specific customer requirements. The Company produces and markets approximately 100 different APIs in several markets. It exports API to emerging, as well as developed markets covering approximately 100 countries. Dr. Reddy’s principal markets in this business segment include North America (the United States and Canada) and Europe. The Company’s API business manufactures and supplies all of the API required in its custom pharmaceutical services business.

Global Generics Segment

Dr. Reddy’s is a generic pharmaceutical company. In India, the Company mainly focuses on the therapeutic categories of cardiovascular, diabetes management, gastro-intestinal and pain management. As of March 31, 2009, it had a total of 184 brands in India. During the fiscal year ended March 31, 2009 (fiscal 2009), the Company’s product launches included OMEZ Insta, its brand of omeprazole powder; PECEF 200, its brand of cefpodoxime; Telsartan AM, its brand of telsartan and amlodipine; Vantej, its brand of calcium sodium phospho silicate, and Xefta, its brand of gefitinib. The Company’s four brands, Omez, Nise, Ketorol and Ciprolet, accounted for 72% of its generics revenues in Russia in fiscal 2009. In North America (the United States and Canada), the Company sells generic drugs, which are the chemical and therapeutic equivalents of reference brand drugs, sold under their generic chemical names. Generic drugs are finished pharmaceutical products ready for consumption by the patient. During fiscal 2009, the Company’s sales of generic drugs in Europe accounted for 24% of its Global Generics segment’s sales. Within Europe, sales are generated by beta Holding GmbH (betapharm), the Company’s German subsidiary.

Proprietary Products Segment

Dr. Reddy’s Proprietary Products segment its specialty pharmaceuticals business, which launched sales and marketing operations for in-licensed dermatology products in fiscal 2009. In the discovery research part of the Proprietary Products segment, the Company is pursuing discovery and development of new molecules, sometimes referred to as New Chemical Entities (NCEs). The Company’s principle research laboratory is based in Hyderabad, India. The compounds under development in the Company’s pipeline include DRF 2593 and DRL 17822.

The Company competes with Hetero Drugs Limited, Divi’s Laboratories Limited, Aurobindo Pharma Limited, Ranbaxy Laboratories Limited, Cipla Limited, Matrix Laboratories Limited, Sun Pharmaceutical Industries Limited, MSN Laboratories Limited, Teva Pharmaceuticals Industries Limited, Dishman Pharmaceuticals & Chemicals Limited, Syngene Limited, Jubilant Organosys Limited, Nicholas Piramal India Limited, Lonza Group, Koninklijke DSM N.V., Albany Molecular Research, Inc., Patheon, Inc., Cardinal Health, Inc., Glaxo SmithKline Pharmaceuticals Limited, Zydus-Cadila Limited, Lupin Limited, Mankind Limited, Alkem Limited, Aristo Pharma Limited, Abbott Limited, Berlin Chemi AG, Gedeon Richter Limited, Krka, Pliva, Lek, Nycomed, Egis Pharmaceuticals Limited, Mylan Laboratories Inc., Andrx Corporation, Watson Laboratories Inc., Novartis Pharma A.G, Caraco Pharmaceuticals, Sandoz group, Ratiopharm group and Stada group.