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Dr Reddy's sees robust drug pipeline

Indian drugmaker Dr Reddy's Laboratories expects two of its anti-diabetes drugs to enter phase III clinical trials in the last quarter of 2001, the company's new head of research said on Monday.

The trials represent the final clinical stage before the company can apply to market the drugs internationally.

The two products have been licensed to Danish firm Novo Nordisk, which carries out the trials and makes "milestone" payments to Dr Reddy's when the drugs clear the various stages of trials.

"Both the drugs should enter phase III of clinical trials by the final quarter of the (calendar) year," R Rajagopalan, president of Dr Reddy's Research Foundation said in a telephone interview with Reuters from Hyderabad.

Phase III trials are safety and efficacy tests on a large group of patients. A company can market a drug only after it comes through phase III trials.

Rajagopalan, who took over as research head from Akella Venkateswarlu last month, added he expected Dr Reddy's to receive milestone payments from Novo Nordisk by the year-end, but said details were not available.

"It's a positive for the stock that the trials are going smoothly," said ABN AMRO analyst Giridhar Iyengar.

"One of the two diabetes drugs could record sales of as much as $1 billion globally in the first year after launch, and this would mean a huge upside for Dr Reddy's as it stands to receive royalty payments on global sales," he said.

He expected phase III trials to take 15-24 months.

Dr Reddy's recorded a net profit of Rs 948.47 million ($20.2 million) on sales of Rs 6.27 billion for the nine months to December.

VISION

While most Indian drug firms are content to make copies of drugs developed by western pharmaceutical companies, Dr Reddy's, which was listed on the New York Stock Exchange in April, has a strong original research programme.

"We want to make Dr Reddy's the first company in India to take a drug from the lab to the market," Rajagopalan said.

While the two diabetes drugs licensed to Novo Nordisk are the showpieces of the company's research programme, it has other drugs at various stages of development, he said.

On April 30, Dr Reddy's said it had selected British contract research organisation Simbec Research Ltd to carry out trials for a drug it had developed to treat cardiovascular disease.

Rajagopalan said he expected the drug to come through the first two phases of clinical trials in 18-24 months, after which a decision would be taken on whether to license it out.

He said he expected a cancer drug, codenamed DRF 1644, to enter phase I clinical trials later this year, adding that the company had shortlisted three contract research organisations in Europe to carry out the trials.

Rajagopalan said another cancer drug named DRF 1042 was in phase I trials in India.

He expected a 30-40 per cent increase in the DRF's research budget for the current financial year to March 2002 from the previous year's Rs 300 million. He said the budget was being finalised.

During the year Dr Reddy's planned to set up a toxicology lab and a technology development centre in Miyapur in the southern state of Andhra Pradesh.

Dr Reddy's shares rose Rs 24.05 to Rs 1,273.40 on Monday.

The company's ADS, which is equivalent to half of one Indian-listed share, closed Friday on the New York Stock Exchange at $13.20, up 7.75 per cent on the day.

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