FIIs pull out of Dr Reddy''s Laboratories

Two leading foreign financial institutions, the government of Singapore and the Abu Dhabi Investment Corporation along with other FIIs have together sold their 5 per cent stake in Dr Reddy''s Laboratories (DRL).

The government of Singapore and the Abu Dhabi Investment Corporation, which had 1.10 per cent and 1.02 per cent stake respectively in the company have sold their entire equity exposure in DRL. Other FIIs such as Emerging Market Growth Fund and Fidelity Management & Research Company have reduced their exposure by 0.24 per cent and 1.18 per cent respectively.

Analysts said no major trigger from the company was seen for the players to move out of the counter. They said that the failure of DRL to sell amlodipine maleate in the US market was a major set back for the company.

In February 2004, the US court of Appeals ruled in favour of Pfizer in its dispute with DRL over amlodipine maleate, delivering a massive blow to the Indian company''s plans of launching the drug in the US. The ruling reversed a lower court judgement allowing DRL to launch the generic formulation of Pfizer''s Norvasc.

In the near term, DRL has four generic drugs in the pipeline: ciprofloxin, iso-tretinonin, fluconazole and olanzipine. The first three are likely to get USFDA approval. Fluconazole and olanzipine have huge potential to drive the financial of DRL.

DRL''s product pipeline for the US currently comprises 31 Abbreviated New Drug Application or ANDAs, one New Drug Application or NDAs and 50 drug master file or DMFs.