Dr Reddy’s shares slip nearly 2% on investor concerns amid $50 million foray into anti-vertigo category

Shares of Dr Reddy’s Laboratories slipped 1.6% to their day’s low of Rs 1,283.20 on the BSE on Thursday, September 11, as investors seemed cautious about the company’s announcement of signing a definitive pact with Janssen Pharmaceutica NV, a Johnson & Johnson unit, to acquire the popular brand Stugeron along with Stugeron Forte and Stugeron Plus for $50.5 million.

The transaction covers 18 markets across APAC and EMEA, with India and Vietnam identified as focus geographies. Stugeron, which contains the antihistamine Cinnarizine, is prescribed for vestibular disorders and vertigo.

In India, the brand leads the Cinnarizine-represented pharmaceutical market (RPM) and ranks second in the broader anti-vertigo represented pharmaceutical market (eRPM). The deal will help Dr. Reddy’s strengthen its Central Nervous System (CNS) portfolio and expand in the anti-vertigo space.


“With this acquisition, Dr Reddy’s gets access to the Stugeron brand and its related portfolio in the mentioned markets, and the operations will be gradually transitioned to ensure smooth integration of the business,” the pharma major said in a regulatory filing on September 10.

“The addition of Stugeron marks a meaningful step in widening our presence in the anti-vertigo therapeutic area, while further building out our CNS portfolio. Supported by our strong market access, we aim to expand the reach of Stugeron and its variants across 18 markets in APAC and EMEA, including India and Vietnam. This is in line with our mission of improving patient access and moving towards our goal of reaching over 1.5 billion patients by 2030,” said MV Ramana, CEO, Branded Markets (India and Emerging Markets), Dr. Reddy’s.

The pharma company reported a marginal 2% year-on-year (YoY) growth in its consolidated net profit at Rs 1,418 crore for the first quarter ended June. Revenue from operations rose 11% YoY to Rs 8,545 crore. On a sequential basis, profit was down 11% and revenue was flat.

The revenue growth during the quarter was broad-based, aided by contributions from the acquired consumer healthcare portfolio in Nicotine Replacement Therapy (NRT) and sustained performance in branded markets.

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Dr Reddy’s shares ended at Rs 1,302, higher by 1% on Wednesday from the last close on the NSE. Shares of the company have risen over 16% in the last six months.

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