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Dr. Reddy's (RDY) Q2 Earnings Decline Y/Y, Sales Increase
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Dr. Reddy's Laboratories Ltd. (RDY - Free Report) reported second-quarter fiscal 2021 earnings of 62 cents per American Depositary Share ("ADS") compared with 90 cents in the year-ago quarter.
However, revenues grew 2% year over year to $666 million.
During the quarter, the company witnessed a gradual recovery in market demand across India, Russia and other markets after seeing low demand in the first quarter of fiscal 2021, although the demand is yet to be fully recovered to pre-COVID-19 levels.
While the sales volume was negatively impacted in some of the markets due to lower prescriptions generated and a fall in patient footfalls in pharmacies/clinics stemming from COVID-19, the pricing environment was relatively stable, new product launches continued and depreciation of the rupee against the U.S. dollar and the Euro supported the business.
So far this year, shares of the company have gained 59.9% against the industry’s decline of 10.2%.
Quarter in Detail
Dr. Reddy’s reported revenues under three segments — Global Generics, Pharmaceutical Services & Active Ingredients (“PSAI”), and Proprietary Products and Others.
Global Generics revenues were INR 39.8 billion ($536 million), up 21% year over year in the fiscal second quarter. Growth was led by contributions from new product launches, volume traction in the base business and integration of the acquired business from Wockhardt in India.
The company launched nine new products in North America, including Ciprofloxacin & Dexamethasone Otic Suspension, Fulvestrant Injection, OTC Diclofenac and OTC Olapatadine.
PSAI revenues were INR 8.5 billion ($114.5 million), up 20% from the year-ago quarter.
Revenues in the Proprietary Products segment came in at INR 622 million, declining 92% year over year.
Research and development expenses were up 19% year over year to $59 million.The company is also undertaking the development of a few projects pertaining to COVID-19-related drugs.
Selling, general and administrative expenses were $178 million, down 1% year over year due to certain one-off expenses last year, which were partly offset by incremental costs post the integration of the acquired divisions from Wockhardt, in 2020.
As of Sep 30, cumulatively, 94 generic filings are pending for approval with the FDA (92 abbreviated New Drug Applications [ANDAs] and 2 two new drug applications). Of these 92 ANDAs, 50 are Para IVs and 26 have first-to-file status.
The company launched COVID-19 treatment drugs —Avigan (Favipiravir) and remdesivir. It further strengthened its development pipeline for COVID-19 treatment drugs, including the vaccine candidate — Sputnik V.
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana. Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Dr. Reddy's (RDY) Q2 Earnings Decline Y/Y, Sales Increase
Dr. Reddy's Laboratories Ltd. (RDY - Free Report) reported second-quarter fiscal 2021 earnings of 62 cents per American Depositary Share ("ADS") compared with 90 cents in the year-ago quarter.
However, revenues grew 2% year over year to $666 million.
During the quarter, the company witnessed a gradual recovery in market demand across India, Russia and other markets after seeing low demand in the first quarter of fiscal 2021, although the demand is yet to be fully recovered to pre-COVID-19 levels.
While the sales volume was negatively impacted in some of the markets due to lower prescriptions generated and a fall in patient footfalls in pharmacies/clinics stemming from COVID-19, the pricing environment was relatively stable, new product launches continued and depreciation of the rupee against the U.S. dollar and the Euro supported the business.
So far this year, shares of the company have gained 59.9% against the industry’s decline of 10.2%.
Quarter in Detail
Dr. Reddy’s reported revenues under three segments — Global Generics, Pharmaceutical Services & Active Ingredients (“PSAI”), and Proprietary Products and Others.
Global Generics revenues were INR 39.8 billion ($536 million), up 21% year over year in the fiscal second quarter. Growth was led by contributions from new product launches, volume traction in the base business and integration of the acquired business from Wockhardt in India.
The company launched nine new products in North America, including Ciprofloxacin & Dexamethasone Otic Suspension, Fulvestrant Injection, OTC Diclofenac and OTC Olapatadine.
PSAI revenues were INR 8.5 billion ($114.5 million), up 20% from the year-ago quarter.
Revenues in the Proprietary Products segment came in at INR 622 million, declining 92% year over year.
Research and development expenses were up 19% year over year to $59 million.The company is also undertaking the development of a few projects pertaining to COVID-19-related drugs.
Selling, general and administrative expenses were $178 million, down 1% year over year due to certain one-off expenses last year, which were partly offset by incremental costs post the integration of the acquired divisions from Wockhardt, in 2020.
As of Sep 30, cumulatively, 94 generic filings are pending for approval with the FDA (92 abbreviated New Drug Applications [ANDAs] and 2 two new drug applications). Of these 92 ANDAs, 50 are Para IVs and 26 have first-to-file status.
The company launched COVID-19 treatment drugs —Avigan (Favipiravir) and remdesivir. It further strengthened its development pipeline for COVID-19 treatment drugs, including the vaccine candidate — Sputnik V.
Zacks Rank & Other Key Picks
Dr. Reddy’s currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the biotech sector are Emergent BioSolutions Inc. (EBS - Free Report) , Castle Biosciences Inc. (CSTL - Free Report) and Vericel Corporation (VCEL - Free Report) , all carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Emergent’s earnings per share estimates have increased from $4.23 to $6.61 for 2020 and from $5.55 to $8.42 for 2021 in the past 90 days.
Castle Biosciences’ loss per share estimates have narrowed from 51 cents to 11 cents for 2020 in the past 90 days.
Vericel’s loss per share estimates have narrowed from 17 cents to 12 cents for 2020 in the past 60 days.
Dr. Reddys Laboratories Ltd Price, Consensus and EPS Surprise
Dr. Reddys Laboratories Ltd price-consensus-eps-surprise-chart | Dr. Reddys Laboratories Ltd Quote
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