Amid growing concerns about potential US import tariffs on pharmaceuticals, Indian generics giant Dr. Reddy’s Laboratories is taking steps to secure its supply chain for key products entering the American market, chief executive Erez Israeli said.
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“The main concern is a potential disruption of supply…most of the activities that we are doing now is working closely with the customers and creating the relevant inventory, service, orders and everything that allows us to give good service,” said Israeli, adding that “service is our number one priority”.
Israeli was speaking at a media briefing on Friday after the company posted its Q4 FY25 results.
Dr. Reddy’s completed the divestment of its manufacturing facility in Shreveport, Louisiana, in the January-March quarter of FY25. This was unrelated to the tariffs, Israeli said. “The facility could not serve our needs in terms of products and activities unrelated to tariffs,” he said.
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The drugmaker is open to investing in manufacturing in the US, but has not identified a viable opportunity at this stage, Israeli said.
US president Donald Trump’s imposition of import tariffs on key goods underscores his “Made in America” agenda. While pharmaceuticals remain exempt for now, Trump has signaled potential future tariffs specifically targeting the sector.
“We have a very good balance sheet, we have a very healthy financial capacity. We are always looking for opportunities,” said Israeli on investing in the US. “We are not rushing and we are not obliged for any commitment…but we certainly want to be in the United States long term. We will look for the relevant opportunity for us,” he added.
For Q4 FY25, Dr. Reddy’s revenue grew 20% year-on year to ₹8,506 crore compared to ₹7,083 crore a year ago, beating estimates. Profits jumped 22% year-on-year to ₹1,594 crore.
The revenue includes ₹597 crore from the acquired consumer healthcare business in Nicotine Replacement Therapy (NRT). Excluding the NRT business, the underlying growth was 12% year-on-year and 2% quarter-on-quarter.
For the full fiscal year of FY25, the company’s revenue jumped 17% y-o-y to ₹32,553 crore.
The performance was driven by contributions from the acquired NRT business, complemented by steady growth across its core businesses including global generics and pharmaceutical services and active ingredients (PSAI), the company said.
Dr. Reddy’s continues to integrate the NRT portfolio acquired from Haleon plc in Europe, with the UK being the first country to see the integration. “In about 12 months from now, we should have most of the countries run by our system, or by our distributors. At the same time we are focusing on how to grow the business by innovation, by adding countries and by improving the operation activities of that franchise. So overall we are very optimistic about NRT,” Israeli said.
The company aims to launch 18-20 products in FY26. It is also enhancing its biosimilars footprint and expects to enter Europe and the US in the coming years.
“We are gearing up to launch [our] products in the coming years in both Europe and US,” Israeli said. Rituximab, Denosumab and Abatacept will be the first products to be launched in the US, starting in fiscal 2027-28
In FY26, Dr. Reddy’s hopes to continue its momentum by growing its base, even as it faces the loss of exclusivity for cancer drug Revlimid. Other drugs in its pipeline, including GLP-1s and its biosimilars, will be important opportunities, Israeli said.
