I've talked about Dr. Reddy's Laboratory's
Revenue for the quarter was down 14% compared with the same quarter last year. Last year's stellar quarter was because of the launch of generic versions of Merck's
Most of the generic drug sales growth came from the version of GlaxoSmithKline's
Even with the drop in revenue, Dr. Reddy's earnings were up 30.5% because the drugmaker was able to push gross margins up to 51% from 43% a year ago. Most of the increase was due to a change in the mixture of products it sells. For instance, it reported an impressive gross margin of 72% for the international sales of its finished dosages.
During the quarter, Dr. Reddy's filed eight abbreviated New Drug Applications (aNDAs), including three aNDAs in first-to-file positions. The last three would give the drugmaker six-month exclusive sales, although it might have to deal with patent issues. Dr. Reddy's was dealt a setback in May when a U.S. court upheld a patent of Eisai's Aciphex that it and fellow generic drugmaker Teva Pharmaceutical
Of course, the roller-coaster analogy only goes so far. On a roller coaster, the peaks become lower and lower until eventually the ride stops. That sure doesn't seem like the path that Dr. Reddy's is on. Instead, it will try to increase the sales peaks as the ride goes along and try to minimize the dips as much as possible. If investors can stomach the ride with generic drugmakers, Dr. Reddy's is certainly one to take a look at, especially because it sells other pharmaceuticals that should level out the peaks and valleys.
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