India’s Dr Reddy’s misses profit view on stiff US competition for generic cancer drug

Indian generic drugmaker Dr Reddy’s Laboratories missed second-quarter profit estimates on Friday, hurt by higher costs and stiff competition for the generic version of the blockbuster cancer drug Revlimid in its key North America market.

The company’s consolidated net profit came in at 13.47 billion rupees ($153.25 million) in the quarter ended September 30, below analysts’ average estimate of 14.1 billion rupees, as per data compiled by LSEG.

The drugmaker’s total revenues rose 9.8% to 88.28 billion rupees during the quarter, largely helped by the Europe market. However, revenue from its biggest market, North America, fell 13% during the quarter.

Analysts from at least three brokerages had estimated a 6%-13% fall in the company’s sales in the U.S.

Lenalidomide, a generic version of Bristol-Myers Squibb’s popular cancer treatment drug Revlimid, has been a key contributor to the company’s North America sales since 2022.

Revlimid’s upcoming patent expiry would open the market to more players, weighing on demand for Dr Reddy’s generic. The company has already flagged increasing competition for the generic drug as new players enter the market.

Meanwhile, the company’s total expenses rose 15.2%.