Dr Reddy’s Laboratories on Tuesday announced a role reversal in the family-controlled pharmaceuticals giant, saying founder Kallam Anji Reddy’s son K Satish Reddy will take over the chairman’s role from son-in-law GV Prasad, who will continue as chief executive officer (CEO).
The move was aimed at separating the roles of the chairman and the managing director and chief executive officer.
“Satish Reddy has been appointed as chairman of the board while he previously held the position of vice-chairman, managing director and chief operating officer (COO),” the company said in a statement. “Prasad will continue as the CEO and provide leadership to the company in an executive role. Prasad has also been appointed as the co-chairman and managing director.”
The company also announced that Abhijit Mukherjee, president, global generics, has been appointed as COO. He will be responsible for both the global generics and pharmaceutical services and active ingredients (PSAI) businesses.
India’s second-largest drugmaker by sales also announced a nearly 16%year-on-year decline in net profit to Rs. 481.60 crore for the quarter ended March from Rs. 570.89 crore in the year-ago period due to higher research and development (R&D) expenditure.
Net sales during January-March grew 4% to Rs. 3,480.90 crore against Rs. 3,339.94 crore in the year-ago period.
The company’s shares fell 3.99% to close at Rs. 2,610.70 on the BSE following the results.
R&D expenses rose to Rs. 398.48 crore for the quarter from Rs. 232.61 crore during the corresponding period last year. Saumen Chakraborty, president, CFO and global head of HR, said that as much as 60% of the total R&D spend would go into global generics.
“Last year, we spent only 6.6% (during the fourth quarter) and this quarter’s R&D spending was 11.4%,” Chakraborty said.