(Reuters) -Indian generic drugmaker Dr Reddy’s Laboratories reported a second-quarter profit that missed analysts’ expectations on Tuesday, weighed down by pricing pressure in a competitive North American market, their biggest by revenue.
The company reported a 9.5% fall in its consolidated net profit after tax to 13.42 billion rupees ($159.6 million) for the quarter ended Sept. 30, missing analysts’ estimate of 14.01 billion rupees, as per data compiled by LSEG.
The drugmaker’s total revenue jumped 16.5% to 80.38 billion rupees, surpassing analysts’ estimates of an 11% rise, as its revenue from North America climbed 17%.
Dr Reddy’s largely attributed the sales growth in the region to a rise in volumes but said it was partly offset by price erosion.
Generic drugmakers such as Dr Reddy’s, Cipla and Zydus have been struggling with a slowdown in the United States due to delayed approvals for new generic drug applications and lower pricing amid stiff competition, according to analysts.
Increased inspections of generic drug manufacturing facilities by the Food and Drug Administration has also added to the pressure, analysts said.
However, these drugmakers have been benefitting from strong sales across North America for their generic version of Bristol-Myers Squibb’s popular cancer treatment drug Revlimid since its launch in 2022.
This, along with other generic drugs used to treat gastrointestinal and cardiovascular issues, boosted sales for Dr Reddy’s in the region.
Revenue from the India business, the company’s second-biggest market, climbed 18% to 13.97 billion rupees.
($1 = 84.0710 Indian rupees)
(Reporting by Kashish Tandon and Rishika Sadam in Bengaluru; Editing by Savio D’Souza and Janane Venkatraman)
