Back to top

Analyst Blog

Dr. Reddy’s Laboratories Ltd. (RDY - Analyst Report) recently announced a collaboration agreement with Merck Serono, a division of Merck KGaA (MKGAF). The companies will co-develop and commercialize a portfolio of biosimilar compounds in oncology, primarily focused on monoclonal antibodies (MAbs).

As per the agreement, Dr. Reddy’s and Merck Serono will co-develop, market and commercialize the compounds around the globe except for a few specific countries. Dr. Reddy has been an innovator and leader in the biosimilars space with four biosimilars molecules already launched till date. The partnership with Merck Serono will expand Dr. Reddy’s presence in this sector and enable the company to participate globally.

The Agreement

As per the deal, Dr. Reddy’s will be responsible for early product development and will complete phase I studies. Depending on the success of the phase I program, Merck Serono will take over manufacturing of the compounds and initiate phase III development. Research and development costs (R&D) will be shared by the partners.

Merck Serono will commercialize compounds developed under the agreement globally, outside the US and a few areas which are co-exclusive or where Dr. Reddy’s enjoys exclusive rights. Dr. Reddy’s will be entitled to receive royalty payments from Merck Serono. In the US, both companies will co-commercialize products on a profit-sharing basis.

We note that the biosimilar market is seeing a lot of activity in the recent past. Apart from Dr. Reddy’s and Merck KGaA, companies like Hospira Inc. (HSP - Analyst Report), Amgen Inc. (AMGN - Analyst Report), and Biogen Idec Inc. (BIIB - Analyst Report) have also entered the biosimilar space through various agreements.

We currently have a Neutral recommendation on Dr. Reddy’s.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CENTURY ALU… CENX 22.53 +4.50%
ERBA DIAGNO… ERB 2.91 +4.30%
PLANAR SYST… PLNR 4.31 +3.86%
MALLINCKROD… MNK 72.17 +3.83%
GTT COMMUNI… GTT 12.06 +3.52%