Dr. Reddy Laboratories Ltd. ADRRDY

Morningstar Rating

Stock Research and Analysis

by Brian Laegeler, CPA

India-based Dr. Reddy Laboratories is one of the best-positioned providers of generic drugs. Cheap labor provides a development and manufacturing cost advantage, and growth in the company's Asian markets dwarfs that of the United States. If clinical Read more

Bulls Say

Dr. Reddy's strong position in emerging Asian markets makes for substantially faster growth compared with its U.S.-based counterparts.

Dr. Reddy was the first Indian manufacturer to successfully challenge a U.S. drug patent. Today, it maintains a robust generic pipeline with numerous first-to-file candidates in sizable markets.

Dr. Reddy has a branded drug effort that doesn't cost much in terms of research dollars but could yield a home run in terms of profits. Read more

Bears Say

Recent history has shown that higher research and development spending does not automatically increase the number of approvable drug candidates. Perhaps Big Pharma has exhausted much of the low-hanging fruit.

The generic drug industry has become increasingly commodified. Price erosion is more severe, authorized generics are stealing share, and patent litigation abounds.

Dr. Reddy has encountered a challenging pricing environment in Germany. Read more

Strategy

Dr. Reddy manufactures off-patent drugs and active pharmaceutical ingredients. Since India began to enforce the patent rights of multinational drug firms, the company shifted its strategy and now looks Read more

Management

Founder and chairman K. Anji Reddy, his son, and his son-in-law all sit on the board and lead day-to-day operations. Although management salaries are high by Indian standards, on a dollar basis, average compensation is small compared with that of a Read more

Profile

Dr. Reddy Laboratories is an India-based generic drug firm that primarily manufactures generic drugs and bulk active ingredients. The company recently established a discovery Read more

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