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Dr. Reddy's Launches Generic Accutane

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Dr. Reddy's Laboratories Ltd. (RDY - Free Report) recently announced the launch of Zenatane (isotretinoin) capsules, its generic version of Hoffman-La Roche Inc.’s acne drug Accutane. The launch followed the approval by the US Food and Drug Administration (FDA) of the company’s Abbreviated New Drug Application (ANDA) for Zenatane.

The US regulatory body gave its approval for the 10 mg, 20 mg and 40 mg dosage strengths of the drug. Dr. Reddy’s has not yet launched the 10 mg version.

According to IMS Health, generic Accutane generated US revenues of approximately $309 million for the 12 months ending Jan 2013.

We remind investors that in Jun 2009, Hoffman-La Roche Inc. had notified the FDA about its intention to discontinue Accutane in the US due to the presence of generic competitors like Mylan Pharmaceuticals Inc. (MYL - Free Report) and Ranbaxy Laboratories Inc.

Dr. Reddy's boasts of a strong generic product portfolio. The company’s Global Generics segment revenues jumped 25% year over year to $380 million in the third quarter of fiscal 2013 (ended Dec 31, 2012). Strong sales in North America and the emerging market territories were primarily responsible for the growth displayed by the Global Generics division.

Generics revenue increased in North America (up 38%), Russia and other CIS (Commonwealth of Independent States) markets (up 32%), India (up 12%) and the rest of the world/RoW (up 42%).  However, generic revenues declined 20% in Europe.

Dr. Reddy’s also has a robust generic pipeline. In Mar 2013, Dr. Reddy's launched its bioequivalent generic version of Novartis AG’s (NVS - Free Report) Zometa (zoledronic acid 4 mg/5 mL) injection in the US. Zometa is indicated for the treatment for hypercalcemia of malignancy.

The stock carries a Zacks Rank #3 (Hold). Another generic player, Akorn, Inc. (AKRX - Free Report) , looks more promising and carriesa Zacks Rank #2 (Buy).

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