Drug discovery in India

Dr Reddy's Laboratories was founded in 1984. Today, it has revenues of US$446 million. NGP finds out how.

NGP. Dr Reddy’s has developed rapidly and also spearheaded drug discovery in India. How have you achieved success so quickly?

Dr. Reddy’s believes that the trajectory of innovation is unpredictable and there is risk involved to those who undertake this journey. It takes courage and vision to look beyond today’s vicissitudes and find hope. But if we don’t seize the moment and challenge our capacities, we will remain the pygmies of this world.

We believe that the future belongs not to those who merely seek opportunity, but to those who create it – and this belief that has been instrumental in all our successes.

NGP. The Indian pharmaceutical market is seen as a low-cost market. Explain how this benefits your company and how you convince those who see cheap costs as cheap quality pharmaceuticals?

The Indian market is seen as a low cost market primarily because of the high availability of skilled manpower: and people are our prime asset also.

Dr. Reddy’s was able to establish itself as a supplier of high quality pharmaceuticals very early on in the global market. An interesting anecdote illustrates this succinctly. The company’s process for Ibuprofen, a popular anti-inflammatory drug, was so advanced that Ethyl Corporation, US, had to accept its superiority in front of the US Trade Representative and ask for tariffs to be put against Dr. Reddy’s to achieve a level playing field. And this was in 1988! So we really don’t have too much convincing to do.

NGP. How do stay one step ahead of the competition in the drugs research sector?

Staying one step ahead in this highly competitive sector can be achieved only by staying focussed on your strengths. Our strength is Discovery Chemistry and we also have our areas of research like Cardio Vascular, Metabolic Disorders, Infectious Diseases and Cancer very clearly defined for us. This ensures optimum utilisation of our resources and ensures that we stay on our path.

The recent formation of Perlecan Pharma, which will de-risk our NCE R&D, is another step that will help us in this direction. Our strategy has been to focus on core therapeutic areas with a project based approach.

NGP. Dr Reddy’s aims its products at the United States, Europe, Russia and India. Are there other parts of the world where you see company growth? How will you break into these markets?

In our industry, to be really ‘global’, scale becomes very important, especially in terms of R&D and manufacturing. Scale cannot come from operating in one or two markets. Currently, we operate in India, Russia, the UK, the US and China. Our entry strategy was to establish beachhead partnerships and, once we gained traction, we launched our own sales. Reddy’s entered the UK through an acquisition and then overlaid our pipeline in the new market.

The Indian market is a very saturated one; but a branded generic can compete over a no-name one. As the market is saturated, there is a lot of price competition in this business.

Globalisation is the primary way for Dr Reddy’s to expand its markets. We are constantly looking for avenues to expand globally. An example is the co-development strategy with Denmark based Rheoscience A/S. Under the terms of the agreement, Rheoscience shall fund all the costs associated with the Phase III clinical trials of DRF 2593 and Dr Reddy’s shall pay Rheoscience a pre-determined amount towards its share of the development costs. Rheoscience will retain the marketing rights to the European Union and China, and Dr. Reddy’s will retain marketing rights in the territories of the United States and the rest of the world.

NGP. How does having your drug research units in Atlanta and Hyderabad benefit your work?

Chemistry/medicinal chemistry are India’s core strengths. But for biotech skills, we hire internationally. Dr Reddy’s has an R&D office in Atlanta because that’s where the talent is.

With the goal of developing a robust clinical pipeline containing multiple novel drug molecules in different stages of clinical development, a large number of discovery-stage and clinical development stage programmes have been strategically planned. Powerful discovery infrastructure that combines world-class biology in important disease pathways with functionally integrated chemistry capabilities drives our programmes.

NGP. Your pharmaceutical ingredients are exported worldwide. Does the Indian infrastructure cause you any difficulty in supplying your products?

We have world-class infrastructure that doesn’t cause us any difficulty in supplying our products. And India's ‘low cost, high intellect’ advantage is always there to help us.

NGP. What has been Dr Reddy’s greatest achievement in its relatively short existence?

That we have managed to become an integrated pharma company with a presence across the entire pharmaceutical value chain and 40 geographies in just 20 years.

NGP. What does the future hold for India’s pharmaceutical industry?

India will be a centre of innovation over the next 10 years. Foreign biotech companies will enter the Indian market and continue to establish R&D centres. Cost of research is definitely an attractive value proposition.