Backed by the blockbuster sales of schizophrenia drug Olanzapine in the US, Indian drugmaker Dr.Reddy’s has seen its profits zooming 88 per cent for the third quarter ended December this fiscal over the previous one. Contributing $ 99 million revenues this quarter, Olanzapine helped Dr.Reddy’s churn highest ever quarterly sales and profit.

The company reported a net profit of Rs 513 crore for the Q3 of FY12, jumping 88 per cent up from Rs 273.2 crore in the corresponding period previous fiscal. The total revenue of the company stood at Rs 2769.2 crore, increasing 46 per cent from Rs 1898.5 crore in the q3 of last fiscal.

“The highly anticipated launch of 180 day exclusivity for Olanzapine also runs in the fourth quarter. But it may not be at the same level as this quarter. It has been our target to concentrate on products with complexity in manufacturing for a long term sustainable growth. Limited competition products will help us fetch sustainable revenue base beyond FY 13” said a company top official.

Dr.Reddy’s and Teva had together launched Olanzapine late in October last year, which is the generic version of Eli Lilly’s Zyprexa. Teva’s Olanzapine Tablets in 2.5, 5 , 7.5, 10 and 15 mg along with Dr.Reddy’s in 20 mg have a 180-day period of marketing exclusivity in the U.S. The product has a market share of around 60 per cent currently. Excluding Olanzapine, the company has seen a yoy growth of around 26 per cent in revenues.

Meanwhile, the company also hopes that US sales will fuel its growth next fiscal. December quarter, In the North American market Dr.Reddy’s saw a strong volume growth contributed by lansaprazole, tacrolimus, and new launches of fondaparinux and antibiotics portfolio. This market saw a 133 per cent rise in revenues over the fiscal, owing to limited competition drugs

“We are moving away from the past patterns of growth drivers like Para IV filings to limited competition drugs, which have complexity in the development or manufacturing stage. Also in the portfolio of products we have made some practical changes for turnaround,” said Satish Reddy, Chief Operating Officer – Dr.Reddy’s.

Russia’s growth was at 13 per cent, India at 11 per cent and 14 per cent in Europe. “Most of the seasonal products got postponed in the Russian market plus the pre season stocking lead to liquidity crunch. However in the month of January we saw a 50 per cent growth in Russia, as wee have robust customer orders. As far as India is concerned there

has been a lower double digit growth but we will wait till the fourth quarter. India continues to be a priority market for us and we are hopeful of returning to industry standards in India next quarter,” said Reddy.

Where as, the rupee depreciation, officials say, has not had much of an impact. “Sequentially there is no effect of rupee depreciation on our EBITDA because of hedging on account of Olanzapine. On a year on year basis yes there has been benefit of forex but we are not changing the hedging stance, said Umang Vohra, Chief Financial Officer- Dr.Reddy’s.