After hitting a Dhoni-style sixer with Zofran’s generic version, company will focus on basics of shareholder value
Business is not cricket, but if you were to go by what GV Prasad has to say, he believes cricketing star VVS Laxman’s style will deliver more shareholder value than MS Dhoni’s pyrotechnics.
Though one can’t be both Laxman and Dhoni, an occasional six can, however, be good for business, says Prasad, who is vice chairman and CEO of Dr Reddy’s Laboratories. He was talking to DNA Money soon after news of the US FDA’s final approval for the company’s generic version of Glaxo’s $640 million nausea drug Zofran came through.
Dr Reddy’s has won 180-day marketing exclusivity for Ondansetron, the generic version of Zofran, in four different strengths. That’s a sixer by any yardstick.
While equities research firm ICICI Securities says that the 180-dau marketing exclusivity will generate $66 million in sales and $29 million in profits, Morgan Stanley estimates sales at $90 million with a whopping 80% margins
“I believe in building up businesses steadily and I think the ones and two are very important though the sixes are good when they happen. But they are very risky. When you go for the fence you also lose wickets more often,” he says, using cricket imagery for explaining his company’s business strategy. Dr Reddy’s was the first Indian company to derisk new drug discovery costs by shifting four potential molecules to a separate outfit called Perlecan.
Though Ondansetron will deliver big short-term revenues for Dr Reddy’s, Prasad says that there is need to build more muscle for consistency, predictability and sustainable growth that is cost-competitive and efficient.
Looking at 2007 and beyond, Prasad felt it will be a challenge for Dr Reddy’s to match the performance of 2006, which has been a milestone year with marketing authorisations, exclusivities and revenues from the German acquisition Betapharm kicking in.
“We have to repeat this consistently in the future also, which is difficult as the company has been firing on all cylinders”, he said.
He did not expect this level of power to continue in the engine. Consistent high returns to shareholders will be the focus in the new-year.
The focus in the new year, therefore, will be on continuing to build the base business and increasing size through geographical expansion, both organically and inorganically. Dr Reddy’s will also build its brand in the US, which could possibly even happen through an acquisition, Prasad said.
As for turning into a billion dollar company in 2006, Prasad says numbers are not too important for him. What is important is doing each business as it should be done. The rest will fall into place.
Source : DNA
Business is not cricket, but if you were to go by what GV Prasad has to say, he believes cricketing star VVS Laxman’s style will deliver more shareholder value than MS Dhoni’s pyrotechnics.
Though one can’t be both Laxman and Dhoni, an occasional six can, however, be good for business, says Prasad, who is vice chairman and CEO of Dr Reddy’s Laboratories. He was talking to DNA Money soon after news of the US FDA’s final approval for the company’s generic version of Glaxo’s $640 million nausea drug Zofran came through.
Dr Reddy’s has won 180-day marketing exclusivity for Ondansetron, the generic version of Zofran, in four different strengths. That’s a sixer by any yardstick.
While equities research firm ICICI Securities says that the 180-dau marketing exclusivity will generate $66 million in sales and $29 million in profits, Morgan Stanley estimates sales at $90 million with a whopping 80% margins
“I believe in building up businesses steadily and I think the ones and two are very important though the sixes are good when they happen. But they are very risky. When you go for the fence you also lose wickets more often,” he says, using cricket imagery for explaining his company’s business strategy. Dr Reddy’s was the first Indian company to derisk new drug discovery costs by shifting four potential molecules to a separate outfit called Perlecan.
Though Ondansetron will deliver big short-term revenues for Dr Reddy’s, Prasad says that there is need to build more muscle for consistency, predictability and sustainable growth that is cost-competitive and efficient.
Looking at 2007 and beyond, Prasad felt it will be a challenge for Dr Reddy’s to match the performance of 2006, which has been a milestone year with marketing authorisations, exclusivities and revenues from the German acquisition Betapharm kicking in.
“We have to repeat this consistently in the future also, which is difficult as the company has been firing on all cylinders”, he said.
He did not expect this level of power to continue in the engine. Consistent high returns to shareholders will be the focus in the new-year.
The focus in the new year, therefore, will be on continuing to build the base business and increasing size through geographical expansion, both organically and inorganically. Dr Reddy’s will also build its brand in the US, which could possibly even happen through an acquisition, Prasad said.
As for turning into a billion dollar company in 2006, Prasad says numbers are not too important for him. What is important is doing each business as it should be done. The rest will fall into place.
Source : DNA