Dr. Reddy’s Laboratories Success Story: How Does This Pharma Company Plans to Lead the Indian Market

Dr. Reddy’s Laboratories Success Story

Company Profile is an initiative by ListMyStartUp to publish verified information on different startups and organizations. The content in this post has been approved by Dr. Reddy's Laboratories.

To talk about pharma and medicines in today's times, the industry is considered one of the most booming industries. These industries have offered a prevalence of contributions to the world of medicine. Medicines and drug usage has been there since immemorial, but the process of manufacturing has changed drastically.

These industries have a lengthy process and go through various stages such as design, formulation, fabrication, withdrawal, dispensation, distillation, and a lot of other things needed for the production of chemical substances.

Dr. Reddy's Laboratories is dedicated to offering innovative, cost-effective medications for healthier living in the most integrated manner possible. It offers a variety of goods and services, such as APIs, specialised pharmaceutical services, generics, biosimilars, and unique formulations, through its three businesses, Pharmaceutical Services and Active Ingredients, Global Generics, and Proprietary Products.

Let's dig more into Dr. Reddy Laboratories' founders, business model, revenue, acquisitions, growth, and more in this article.

Dr. Reddy's Laboratories - Company Highlights

Headquarters-Hyderabad, India
Sector-Pharmaceutical Manufacturing
Founder-Dr. Kallam Anji Reddy
Founded-1984
Revenue-$2.83 billion (FY22)
Website-drreddys.com

Dr. Reddy’s Laboratories - About

This pharma manufacturing company was founded in 1984 by Dr. Kallam Anji Reddy. The company initially started as a supplier for Indian drug manufacturers but shortly diversified its operations to export to other less-regulated markets. The company took advantage to get approval from other drug licensing companies like the U.S Food and Drug Administration (FDA), which resulted in huge profits that led to their formulations and setting up bulk drug manufacturing factories in advanced places.

Dr. Reddy's main therapeutic interventions are in the areas of dermatology, cancer, diabetology, gastroenterology, oncology, and pain management. It has markets all over the world like in the USA, India, Russia & CIS countries, and Europe. The company has 21 manufacturing facilities spread over 66 countries.

Dr. Reddy's Laboratories - Industry

India is one of the top 10 exporters of pharmaceuticals. It supplies 50% of vaccines in the global market, 40% of generic demand in the US, and 25% of all medicine in the UK.

As per a Pharmaceuticals industry report, India's domestic pharmaceutical market was at $42 billion in 2021. It is predicted to reach $65 billion by 2024, and $120-130 billion by 2030.

Dr. Reddy's Laboratories is known for manufacturing and marketing a wide range of pharmaceuticals in India and overseas

Dr. Reddy's Laboratories - Founder

Dr. Kallam Anji Reddy is the founder of Dr. Reddy's Laboratories.

Dr. Kallam Anji Reddy

Dr. K Anji Reddy was born in 1941 to a modest but prosperous farming family in the Andhra Pradesh hamlet of Tadepalli. His inspiration goes to his father as he grew up watching him make herbal pills and distributed them without charging any penny to the needy ones.

Dr. Anji Reddy completed his schooling at Anapothana Zilla Parishath High School Nutakki. He got his degree in B.Sc. (Tech) from the University Department of Chemical Technology, Mumbai. Soon after graduation, he got his PhD in Chemical Engineering from the National Chemical Laboratory, Pune. After that, he spent six years working for the government-owned Indian Drugs and Pharmaceuticals Ltd (IDPL). This exposure to working at the IDPL fueled his desire to start his own business.

Dr. Kallam Anji Reddy quotes, "It was a dream. It was not a plan on the drawing board, no. But it was a dream.”

For his contributions to the Indian pharmaceutical industry, the Indian Government honoured him with the Padma Shri in 2001 and the Padma Bhushan in 2011. He was also a representative on the Trade and Industry Council for the Indian Prime Minister.

Dr. Kallam Anji Reddy suffered from cancer and lost the battle on 15 March 2013. He died at the Apollo Hospital, Hyderabad. At present, the company is run by his son, Satish Reddy and son-in-law, G.V. Prasad.

Dr. Reddy's Laboratories - Startup Story and Growth

Soon after the construction of its manufacturing plant at Bollaram, the company commenced its business in 1985. In one year, Dr. Reddy's Laboratories got listed on the Bombay Stock Exchange and entered the international market during this year with the export of the API Methyldopa.

The company started its first manufacturing of Omeprazole in 1991, which is considered to be the best product worldwide soon after, they entered the Russian market, their first-ever international exposure.

In the late 1990s, Dr. Reddy's Laboratories US generics market established its offices in New Jersey. Besides their international establishment, the company started manufacturing Biologics to give Indian consumers a taste of high–cost medicines at reasonable prices.

The company introduced the first generic medicine, "Ibuprofen" under its brand in the US in 2008 after experiencing significant growth in the Indian market.

In 2005, Dr. Reddy's Lab developed India’s first drug for the treatment of diabetic foot ulcers.

To touching a revenue of $1 billion in the mid-2000s, the company made several drugs like antibody biosimilar monoclonal antibodies to treat certain autoimmune diseases to entering into Colombia with a portfolio of high-quality and affordable medicines for cancer patients in 2016, the company has come a long way.

In 2020, to combat Covid-19, Dr. Reddy's Laboratories made several partnerships from all over the world to bring an innovative therapeutic approach to India. They came up with its first generic Otic suspension product in the U.S.

Last year, the company collaborated with Eli Lilly to export Baricitinib to India. They also collaborated with Merck to provide Molnupiravir to COVID-19 patients everywhere.

Dr. Reddy's Laboratories - Mission and Vision

The vision of Dr. Reddy's Laboratories is to live by seven core values, which they give a lot of importance to it. The seven values are:

Sustainability
Integrity and transparency
Safety
Quality
Collaboration and teamwork
Productivity
Respect for the individual

Dr. Reddy's Laboratories - Logo and Tagline

Since it was the dream of Dr. K Anji Reddy to create affordable medicine for every class of people, he started the company with his surname, Dr. Reddy's Laboratories. The company works with the tagline, "Good Health Can't Wait."

Dr. Reddy's Laboratories - Business Model

Dr. Reddy's Laboratories' business model is mostly about research and development, end-to-end production, and cutting-edge digital technology to fulfil its commitments to patients all around the world. Their business model is successful as they produce drugs in bulk size and have in-house R&D centres.

They do business by providing the following services:

India Branded Generics - By developing medicines for acute and chronic diseases, and establishing speciality care, institutional/hospital business, OTC, and eCommerce.

North America Generics - By having establishments in New Jersey, and Canada to offer their affordable healthcare to the world.

Emerging Markets Branded Generics - They have their services in Southeast Asian countries. The company provides medicines - the Association of Southeast Asian Nations (ASEAN), Africa, Australia, and New Zealand; CIS and Romania; China; Latin America and Russia.

Europe Generics - The company also offers its services to give access to affordable and innovative medicines in Europe as well. They have a presence in France, Germany, Italy, Netherlands, Spain, Ukraine, and United Kingdom.

Active Pharmaceutical Ingredients (APIs) - They manufacture bulk drugs or active pharmaceutical ingredients (APIs), which remain a cornerstone of the company.

Biologics - The company generates and markets a variety of immunology and oncology-related biosimilar medicines. This is the most integrated part of the company.

Aurigene Pharmaceutical Services - With scale-up and commercial manufacturing facilities in India, the UK, Mexico, and the US, Dr. Reddy's Aurigene Pharmaceutical services provide discovery and development services at top-notch facilities in India.

Dr. Reddy's Laboratories - Revenue

Dr. Reddy's Laboratories Revenue from FY2015 to FY2022 (Revenue in billion INR)

The company mostly gets 45% earnings from North America Generics, then 18% from India, 19% from Russia, 12% from Europe, and 6% from the rest of the world.

The company has generated $74.9 billion from NAG, $16.6 billion from Europe, $45.7 billion from emerging markets, and $42 billion from India in FY22.

Dr. Reddy's Laboratories recorded a revenue of $2.83 billion for FY22 which was an 8.94% increase from $2.59 billion in FY2021.

Dr. Reddy's Laboratories - Challenges Faced

The manufacturing business is the toughest business to operate especially in medicine and drugs. Dr. Reddy's Laboratories have had faced challenges in its journey. There were a few controversies in which the company was caught up. The company had quality problems in its Mexico unit and a few fatal accidents.

Recently, the company announced a 76% year-over-year (YoY) decline in profit after tax (PAT) to Rs 88 crore in Q4FY22 due to pricing pressure in North America and Europe, decreased export benefits, and a rise in inventory reserves.

Dr. Reddy's Laboratories - Awards and Achievements

The company has got several awards for its performance in the pharmaceutical industry. Below is the list of awards won by Dr. Reddy's Laboratories:

Top Employers Institute – recognised as Top Employer in South Africa
Sustainability 4.0 Awards 2022 – Sustainable Corporate of the Year award
Dow Jones Sustainability Index 2021 – Among top 10 leaders globally; featured for 6th year in a row in the Emerging Markets category
Member of the Sustainability Yearbook 2022
Bloomberg Gender-Equality Index 2022 - the only Indian pharma company in the index
CII SCALE Award 2021 – for excellence in logistics and supply chain for the 7th consecutive year
CII Industrial Innovation Awards 2021
Global Generics & Biosimilars Awards 2021
United Nations Women’s Empowerment Principles Awards – 2nd runner-up in the Gender Inclusive Workplace category in Asia-Pacific
Indo-American Chamber of Commerce 2021
Economic Times - Futurescape 8th Sustainability Index Report 2021
Dr. Reddy’s Columbia – Great Place to Work in 2021

Dr. Reddy's Laboratories - Future Plans

The company is aiming to be among the top 5 drug maker companies in the domestic market by planning mergers and acquisitions to up its game.

The co-chairman and managing director of Dr. Reddy's Laboratories, GV Prasad said in an interview, "Getting into the top 5 is our aspiration. On an organic curve, you can’t reach there (top five). We are open for M&A but for the right price and buttressed by organic execution. We have to pull all the levers".

FAQs

When was Dr. Reddy's Laboratories founded?

Dr. Reddy's Laboratories was founded in the year 1984 and is headquartered in Hyderabad.

Who is the founder of Dr. Reddy's Laboratories?

Dr. Kallam Anji Reddy is the founder of Dr. Reddy's Laboratories.

What was Dr. Reddy's revenue in 2022?

Dr. Reddy's Laboratories recorded revenue of 2.8 billion USD in FY2022.

What was Dr. Reddy's Laboratories' recent acquisition?

Dr. Reddy's Laboratories' most recently acquired Germany-based Nimbus Health GmbH. The company announced the agreement of acquisition in February 2022.