Dr. Reddy’s Laboratories Limited has disclosed a business development under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company announced the sale of its step-down wholly owned subsidiary, Dr. Reddy’s Laboratories Louisiana LLC (DRLL), along with its associated manufacturing facility in Shreveport, Louisiana, USA. This deal was finalized on January 6, 2025, and the sale will be completed by March 18, 2025.
Key Details of the Transaction: The sale agreement involves Jaguar Labs Holdings, LLC, a Delaware-based limited liability company. Dr. Reddy’s Laboratories Louisiana LLC, which operates a manufacturing facility in Shreveport, Louisiana, will no longer be a subsidiary of Dr. Reddy’s Laboratories Inc. and Dr. Reddy’s Laboratories Limited after the closure of this deal.
Financial Impact: For the fiscal year 2023-24, Dr. Reddy’s Laboratories Louisiana LLC contributed the following to the parent company’s consolidated financials:
- Turnover: USD 38.91 million, which accounts for approximately 0.68% of the consolidated income of Dr. Reddy’s Laboratories.
- Net Worth: USD 29.49 million, which represents 0.47% of the consolidated net worth of the company.
The financials of DRLL primarily include inventories and inter-company receivables, which are expected to be utilized or realized before the completion of the deal. The manufacturing facility in Shreveport has been considered non-strategic for the company, as it does not hold a significant product pipeline, and no products or Abbreviated New Drug Applications (ANDAs) are being divested as part of this sale. Any products currently manufactured at the site are being transitioned to other locations based on commercial viability.
Rationale for the Sale: The sale aligns with Dr. Reddy’s strategic focus on optimizing its global operations. As stated by the company, the Shreveport facility has not been integral to its long-term product development pipeline. This move is seen as a step towards streamlining operations, enhancing the focus on strategic growth areas, and better aligning resources with the company’s future goals.
The deal will have a minimal impact on the ongoing operations of Dr. Reddy’s Laboratories, as the facility in Shreveport was not contributing to the company’s primary product and business lines. Dr. Reddy remains focused on continuing its market leadership in the pharmaceutical industry, particularly in the generics and biosimilars sectors.
