Dr Reddy’s calls off joint venture with Fujifilm; stock up

MUMBAI: Dr Reddy’s Laboratories was comfortably placed in the positive territory after it terminated its memorandum of understanding with Japan-based Fujifilm for generic drugs business.

The duo was planning an exclusive partnership in the generic drugs business for the Japanese market and to establish a joint venture in Japan. The two companies had conducted detailed studies on the establishment of a joint venture for developing and manufacturing generic drugs.

“However, as the Fujifilm realigns its long-term growth strategy for the pharmaceutical business, both companies have led to mutual agreement to terminate the MoU,” Dr Reddy’s Laboratories said in a filing to the stock exchanges.

The two companies will continue to explore partnership and alliance opportunities in other pharmaceutical businesses such as API (active pharmaceutical ingredient) development and manufacturing, contract research and development and manufacturing and the development and marketing of super-generics.

“Given that the JV does not contribute, this will not change our estimates and hence maintain our buy recommendation on the stock with a target price of Rs 2,535,” said Sarabjit Kour Nangra, (VP-Research , Pharma), Angel Broking.

At 02:45 pm, the stock was at Rs 2,114.90, up 1.07 per cent, on the BSE. It touched a high of Rs 2,129 and a low of Rs 2,082 in trade today.