Dr.

Reddy
Link: http://businesstoday.intoday.in/story/dr-reddys-laboratoriessuccession-plan-anji-reddy-health/1/22007.html
Last quarter, Kallam Anji Reddy transferred a 0.35 per cent stake in Dr Reddy's Laboratories to a familyowned entity. The value of the stake was insignificant - around Rs 90 crore in a company with a market cap of around Rs 28,000 crore. It was a routine transaction, except for one little detail: Reddy is no longer a direct shareholder in the company he founded. The 0.35 per cent stake was the last of his holding. Not that things have changed in any way. He owns 40 per cent of the family entity, Dr Reddy's Holdings, which owns around 24 per cent of the pharma leader. So he is still pretty much the company's largest promoter-shareholder, albeit indirectly. While the share transfer was a minor transaction, it could, perhaps, indicate that Reddy is getting his affairs in order. Back in 2008, when BT did a feature on his philanthropy, he said his dream was to transfer all or a part of his stake to a foundation he planned to set up. The scientist entrepreneur-turned-philanthropist's dream is to provide people with quality healthcare for everything from the common cold to cancer. But there are question marks over Reddy's own health . Those who know him, say he has been looking a little frail. "He is not in the best of health right now," one of them stated. BT has not been able to confirm the extent of his ill-health despite several attempts to reach Reddy. His office said he was busy. His family would not comment. G.V. Prasad, the company's Vice Chairman and CEO, said, "It is a personal matter." The company's position seems to be that it is a private matter with no compelling reason to be in the public domain. Click here to Enlarge But the concern expressed by those who know him suggests there could be cause for worry. Normally, the health of the FounderChairman, who still wields considerable control and influence over a company, would be a matter of much concern for its stakeholders. After all, Dr Reddy's is India's largest pharma company by revenue (after Ranbaxy, now part of Japan's Daiichi Sankyo). It is also listed on the New York Stock Exchange. But it has been common knowledge for a while now that Reddy is no longer involved in the day-to-day operations of the company. Over the last three years, that responsibility has been taken over by

Prasad, who is also his son-in-law, and K. Satish Reddy, the Managing director and Chief Operating Officer, who is Reddy's son. A clear management structure is in place, with roles clearly divided between them. While Satish, 44, is the operations and revenue head of the company's Indian and global operations, Prasad, 51, leads its innovation efforts, new lines of business and corporate functions. Incidentally, both draw similar salaries, in the region of Rs 6.5 crore, going by the company's 2011 annual report. Reddy earned Rs 10.58 crore. The stock market, well aware that Reddy has taken a backseat as far as operations are concerned, has factored in the change. Analysts say there are no promoter-related concerns at the pharma major and that it is one of the most professionallyrun companies in the country. On January 27, the company's scrip closed at Rs 1,643.60 on the Bombay Stock Exchange, closer to its 52-week high of Rs 1,716 than the low of Rs 1,387. This was despite reports that Dr Reddy's had run afoul of US health authorities for not highlighting important information on a promotional website for an injectable drug it launched in the US recently. The company issued a statement saying that it had resolved the issue. Reddy set up the company in 1984, with a capital of Rs 25 lakh. In 1993, he pioneered Indian pharma's journey into drug discovery, setting up a research facility in what was once his farmhouse. In the early days, the company made good progress in this space and built a healthy pipeline of potential molecules with promise. It even got outlicensing deals with some Big Pharma companies and also received milestone payments. Despite the promising start, though, the company is yet to launch a new drug, something Reddy always dreamt of. Today, Dr Reddy's has become more prudent with research spends. The focus has shifted to research on difficult-to-make generic drugs, which have a higher likelihood of success upon launch. But this is something Reddy has left to the company's young management. Analysts believe the company today has an impressive pipeline of limited-competition products for the US market, the world's largest, which accounts for about 35 per cent of its revenues. "We are overweight on the company and see it posting strong growth in the next two to three quarters," says Girish Bakhru, an analyst at HSBC Securities and Capital Markets. In a January 9 report, the securities house said Dr Reddy's was its preferred pick in the sector. It believes the company's US generics pipeline is underestimated. Other brokerage houses such as Motilal Oswal and IIFL, too, have a positive outlook on the company. With the company in good hands, Reddy's focus in recent years has been on his other great passion: philanthropy. He devoted much of his time and resources to a range of development issues, ranging from mid-day meals for schoolchildren to ensuring safe drinking water across the country. Perhaps, those efforts will get a greater impetus now.

Article : 2 Link: http://www.livemint.com/Companies/pxlbnrT9va1V8oUtLHdtkL/Dr-Reddys-to-focus-onEurope-and-India-markets.html

Dr Reddys to focus on Europe and India markets

Chief executive Prasad says firm investing in capabilities in advance to ensure there are no regulatory problems
Viswanath Pilla
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First Published: Tue, Jul 09 2013. 10 52 PM IST

G.V. Prasad, chairman, Dr Reddys Laboratories. Photo: Mint

Updated: Tue, Jul 09 2013. 11 19 PM IST Hyderabad: Dr Reddys Laboratories Ltd , Indias largest drug maker by sales, said it will focus on fixing its European operations and strengthening its local business, the two major markets where it has underperformed. Europe has been through lot of challenges, G.V. Prasad, chairman and chief executive officer of Dr Reddys, said in an interview on Friday. He took over as chairman in April after the death of father-inlaw and founder-chairman K. Anji Reddy. A chemical engineer from the Illinois Institute of Technology in Chicago, Prasad also holds a masters degree in industrial administration from Purdue University in the US. After a brief stint in his familys construction business, Prasad in 1990 became managing director of Cheminor Drugs Ltd, a company involved in the production of bulk drugs. In December 2000, after the merger of Cheminor with Dr Reddys, Prasad took over as executive vice-chairman and chief executive of the merged entity. Dr Reddys European sales declined in the year ended 31 March on account of its struggling German unit Betapharm Arzneimittel GmbH, which contributes about 70-75% of revenue in Europe. Dr Reddys bought Betapharm, the fourth largest German generic drug marketing firm, for 480

million (Rs.3,750 crore today) in February 2006 but a dramatic shift of policy in Germany to source medicines from the lowest-cost vendor through a tender-based model has hurt the company. Europe contributes about Rs.772 crore, or 9.4%, of total global generic sales of Rs.8,256 crore. For the year ended 31 March, Dr Reddys reported revenue of Rs.11,626.56 crore and a profit of Rs.1,677.6 crore. Despite restructuring operations and cost-control measures such as shifting part of the manufacturing to India and taking part in the tender-based system, Dr Reddys has found it tough to crack the German market. We dont want to compete in this kind of space, we want to add value through innovation so we are going to move towards products which are more sold as brands, Prasad said. As part of the new turnaround strategy for Germany, Dr Reddys will launch products outside the scope of tenders and plans to adopt a selective approach of picking its product portfolio. Prasad said the two products launched in the German market under the new strategy are doing reasonably well and it could take at least two-three years for a real turnaround. India is another important growth market for Dr Reddys. It still doesnt figure among the top 10 companies in India as far as local sales go, although this increased 13%, faster than the industrys 10.2%. We are not so happy about performance in India. We havent done a great job. So growing in India becomes a very high priority, Prasad said. According to a report by management consultancy McKinsey and Co., Indias pharmaceutical market is expected to touch $20 billion by 2015, and is expected to figure among the top 10 globally on account of higher disposable incomes, the expansion of medical infrastructure and greater penetration of health insurance. Ninety percent of Indias pharmaceutical market comprises generics. Dr Reddys has started concentrating on the Indian market in the past few years. It has appointed an army of sales representatives, refurbished its portfolio and launched new products in therapeutic areas such as gastrointestinal, pain, anti-infectives, dermatology, cardiovascular and oncology. The big chunk of the Indian portfolio, the big brands like Nise (anti-inflammatory drug nimesulide) and Omez (gastrointestinal drug omeprazole) are growing slowly or (contracting) in particular areas, resulting in pressure on their topline, said Hemant Bakhru, analyst at Mumbai-based foreign brokerage CLSA Asia-Pacific Markets. They havent been able to replace those big brands with successful bigger brands.

Prasad is concerned about the rapid commoditization of branded generics in developed markets, especially the US, the worlds biggest drug market, as more and more generic companies with same relative competitive advantages are competing in the same space. There is an uncertainty of brands turning commodities that is the risk you face, Prasad said. Dr Reddys makes nearly half of its money from the North American market. So companies like us, to maintain growth and to maintain trajectory, we have to differentiate ourselves and we believe we differentiate ourselves through our investments in R&D, investments in manufacturing, Prasad said. You have seen whats happening to companies through regulatory problems that they face. We dont want to be in that situation, we are investing ahead of time on all those capabilitiesthats how we differentiate ourselves as a company. As part of this Dr Reddys is betting heavily on biosimilars and complex generics. A biosimilar is a generic version of a biopharmaceutical drug, an area of considerable interest for pharmaceutical firms, especially generic companies such as Dr Reddys, as a new driver for growth. In contrast to conventional chemical medicines, biotech products are impossible to copy precisely, forcing generic companies to develop biosimilars, which are close to the original but need to be sold as separate medicines. But the landscape is starting to change as patents expire and regulators establish guidelines for developing biosimilar versions of drugs, posing a threat to leading biotech groups such as Roche
Holding AG and Amgen Inc.

Dr Reddys has an early mover advantage in the biosimilar space, having launched its first such drug called Filgrastim back in 2001. Filgrastim boosts white blood-cell production and is marketed by Amgenunder the brand name Neupogen. The most successful biosimilar product of Dr Reddys is Reditux, a generic version of Biogen Idec Rituximab, a monoclonal antibody used in the treatment of cancer. Dr Reddys sells four biosimilars in markets that are less regulated than the US and Western Europe. The process of launching a biosimilar is as good as introducing a new chemical entity (NCE), which involves high investment and risk. To derisk biosimilar development, Dr Reddys partnered with German biotech firm Merck Serono, a division of Merck KGaA, in June last year. Both the companies will jointly develop and manufacture biosimilar compounds that go off patent to treat cancer. We partnered not just because of investment risk. There are other risks alsothere is a high investment, the commercial model is not played out, there is the intellectual property battle, then

there is the manufacturing at scale to the regulated world requirements in the industry which is just still maturing, Prasad said. Dr Reddys plans to spend $200 million, or 7% of its sales, on research and development, and a significant part of this will be devoted to biosimilars. After the Betapharm debacle, Dr Reddys is treading a cautious path when it comes to a mergers and acquisitions strategy. The company has resumed acquisitions but on a small scale; it bought Dutch company OctoPlus
NV in October 2012, which specializes in drug delivery technologies, for Rs.190 crore.

In 2011, the company acquired GlaxoSmithKline Plc.s penicillin facility in Bristol. Prior to that, in 2008, the company acquired BASF SEs formulation manufacturing unit at Shreverport, Louisiana, and Dow Pharmaceutical Sciences Inc.s small molecule business in the US. Our strategy for acquisition is very clear, he said. Either it helps us bring more innovative products to the market or it deepens the market presence in branded markets, There are hardly any negative things I can see in Dr Reddys strategy but like all other Indian companies they should now live up to more vigilant US regulator in the backdrop of the recent episode involving Ranbaxy Laboratories Ltd, said Sarabjit Kour Nangra, an analyst at Mumbaibased Angel Broking Ltd. Ranbaxy had to pay $500 million under a settlement with the US Food and Drug Administration after admitting to felony charges related to drug safety. Dr Reddys was one of the first companies in India to enter drug discovery. It was also the first Indian company to license a molecule that it had discovered to another firm to continue with the research needed. The anti-diabetes molecule was licensed to Novo Nordisk of Denmark. The molecule was later withdrawn due to carcinogenicity or cancer causing properties. Meanwhile, another antidiabetes molecule balaglitazone was found to be commercially unviable. Finding new drugs was a passion of founder Anji Reddy, who began his career as a researcher before turning into an entrepreneur. Drug discovery is something we are a little more cautious about than we were under Dr (Anji) Reddys leadership. We have not given up what he had in mind but we have refined it somewhat. Over time may be we dial it up, but immediately, there is no major shift, Prasad said.

Article 3 Link: http://finance.yahoo.com/news/galena-biopharma-dr-reddys-announce-120500038.html

Galena Biopharma and Dr. Reddy's Announce Strategic Partnership for NeuVax(TM) in India
Galena BiopharmaJanuary 14, 2014 7:05 AM

Galena licenses commercial rights to Dr. Reddy's for NeuVax(TM) (nelipepimut-S) in breast and gastric cancers Dr. Reddy's to lead the development of NeuVax in Gastric Cancer, significantly expanding the potential addressable patient population Galena to receive development and sales milestones, as well as double-digit royalties on net sales Licensing and development terms contracted conditioned upon agreement on ancillary activities PORTLAND, Ore. and HYDERABAD, India, Jan. 14, 2014 (GLOBE NEWSWIRE) -- Galena Biopharma (GALE) and Dr. Reddy's Laboratories Ltd. (RDY) today announced a strategic development and commercialization partnership on NeuVax(TM) (nelipepimut-S) in India. Galena Biopharma is a biopharmaceutical company commercializing and developing innovative, targeted oncology treatments that address major unmet medical needs to advance cancer care. Dr. Reddy's is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. "This partnership with Dr. Reddy's is consistent with our strategy to expand the clinical utility of NeuVax in unmet medical needs while simultaneously increasing the commercial footprint of this innovative cancer immunotherapy," said Mark J. Ahn, Ph.D., President and CEO of Galena Biopharma. "Dr. Reddy's is a leading pharmaceutical company in India with

significant commercialization and development expertise. The gastric cancer trial will add a significant indication to our pipeline for NeuVax, while doubling our potential patient population if approved." G V Prasad, Chairman and CEO, Dr. Reddy's commented, "The partnership accelerates our strong commitment to innovation and efforts to bring newer options for cancer patients. We are delighted with our partnership with Galena Biopharma and we believe NeuVax can be a good potential treatment option to prevent the recurrence of breast and gastric cancer." About NeuVax(TM) (nelipepimut-S) NeuVax(TM) (nelipepimut-S) is the immunodominant nonapeptide derived from the extracellular domain of the HER2 protein, a well-established target for therapeutic intervention in breast carcinoma. The nelipepimut-S sequence stimulates specific CD8+ cytotoxic T lymphocytes (CTLs) following binding to HLA-A2/A3 molecules on antigen presenting cells (APC). These activated specific CTLs recognize, neutralize and destroy, through cell lysis, HER2 expressing cancer cells, including occult cancer cells and micrometastatic foci. The nelipepimut immune response can also generate CTLs to other immunogenic peptides through inter- and intra-antigenic epitope spreading. Based on a successful Phase 2 trial, which achieved its primary endpoint of disease-free survival (DFS), the U.S. Food and Drug Administration (FDA) granted NeuVax a Special Protocol Assessment (SPA) for its Phase 3 PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment) study. The PRESENT trial is ongoing and additional information on the study can be found at www.neuvax.com. A randomized, multicenter investigator sponsored, 300 patient Phase 2b clinical trial is also enrolling patients to study NeuVax in combination with Herceptin(R) (trastuzumab; Genentech/Roche). According to the National Cancer Institute, over 230,000 women in the U.S. are diagnosed with breast cancer annually. Of these women, only about 25% are HER2 positive (IHC 3+). NeuVax targets the approximately 50%-60% of these women who are HER2 low to intermediate (IHC 1+/2+ or FISH About Galena Biopharma

Galena Biopharma, Inc. (GALE) is a Portland, Oregon-based biopharmaceutical company commercializing and developing innovative, targeted oncology treatments that address major unmet medical needs to advance cancer care. For more information visit www.galenabiopharma.com. About Dr. Reddy's Dr. Reddy's Laboratories Ltd. (RDY) is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses - Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products -- Dr. Reddy's offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars and differentiated formulations. Major therapeutic focus is on gastro-intestinal, cardiovascular, diabetology, oncology, pain management and anti-infective. Major markets include India, USA, Russia-CIS and Europe apart from other select geographies within Emerging Markets. For more information, log on to: www.drreddys.com Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the planned clinical trial of NeuVax in gastric cancer in India and the commercialization of NeuVax in India in both breast and gastric cancers. These forwardlooking statements are subject to a number of risks, uncertainties and assumptions, including those identified under "Risk Factors" in Galena's Annual Report on Form 10-K for the year ended December 31, 2012 and most recent Quarterly Reports on Form 10-Q filed with the SEC. Actual results may differ materially from those contemplated by these forward-looking statements. Galena does not undertake to update any of these forwardlooking statements to reflect a change in its views or events or circumstances that occur after the date of this press release.