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Dr Reddy's Bets Big on Biosimilars & Innovation
23 Feb
Summary
- Company accelerating capital to biosimilars for future growth.
- R&D spending to remain between 8-10% of sales.
- China's regulatory system praised for speed and efficiency.
Dr Reddy's Laboratories is prioritizing biosimilars and innovation to drive future growth, even as generics and active pharmaceutical ingredients (APIs) remain central to its revenue. The company is increasing capital investment in biosimilars, anticipating significant scale within the next five years. R&D expenditure is slated to remain at 8-10% of sales.
The company views the industry's shift towards biologics and biosimilars as a trend to follow, investing in these areas for future pipelines. Innovation, particularly in oncology, is also a key focus, with the expectation that novel assets will contribute to revenue. Dr Reddy's acknowledges the complexity of biologics manufacturing compared to traditional small molecules.
Regarding regulatory environments, Dr Reddy's co-chairman G.V. Prasad noted China's efficient and fast regulatory system as a model. He also discussed the importance of scientific talent and creating a vibrant home market for innovative products to offset R&D costs. India's government is supportive of innovation, but building institutional capacity for specialized roles remains a challenge.
Addressing drug affordability, Prasad stated that effective and superior drugs command premium pricing, supported by insurance systems. He sees AI as a tool to enhance speed and precision in pharma processes rather than fundamentally changing economics. Breakthrough drugs like semaglutide for obesity are recognized, with responsibility for appropriate use resting with medical professionals.
