Dr. Reddy’s signs voluntary licensing agreement with Gilead Sciences to manufacture and commercialise Lenacapavir in India and other countries

Rhea-AI Summary

Dr. Reddy's Laboratories (RDY) has entered into a royalty-free non-exclusive voluntary licensing agreement with Gilead Sciences Ireland UC for the manufacture and commercialization of Lenacapavir in India and 120 other countries. Lenacapavir is an FDA-approved drug for treating HIV-1 infection in heavily treatment-experienced adults with multidrug-resistant HIV-1. The agreement covers both the current approved indication and potential future use in HIV prevention (PrEP).

Dr. Reddy's will be responsible for technology transfer, manufacturing, clinical studies, product registration, and launch in the agreed markets. This collaboration aims to improve patient access and affordability for HIV treatment and prevention in primarily low- and lower-middle-income countries with high HIV disease burden.

Positive

• Expansion into new markets with access to 121 countries
• Entry into HIV treatment and prevention market
• Potential for increased revenue through manufacturing and commercialization of Lenacapavir
• Royalty-free agreement, potentially leading to higher profit margins
• Alignment with company's goal to impact 1.5 billion patients by 2030

Negative

• None.

Insights

Medical Research Analyst

This licensing agreement between Dr. Reddy's and Gilead Sciences for Lenacapavir is a significant development in HIV treatment accessibility. Lenacapavir, as a first-in-class HIV-1 capsid inhibitor, offers a new mechanism of action for treating multidrug-resistant HIV-1 infections. Its potential for both treatment and prevention could be game-changing in the fight against HIV, especially in low- and lower-middle-income countries.

The royalty-free, non-exclusive agreement covering 121 countries, including India, positions Dr. Reddy's to significantly expand access to this innovative therapy. This aligns with global efforts to combat HIV in regions with high disease burden. The inclusion of potential future indications for HIV prevention (PrEP) in the agreement is forward-thinking and could have substantial public health implications.

For investors, this deal represents a strategic move by Dr. Reddy's to expand its HIV portfolio and potentially capture a significant market share in emerging economies. While immediate financial impact may be , the long-term potential for revenue growth and market expansion is considerable, especially if Lenacapavir gains approval for HIV prevention.

Market Research Analyst

This licensing agreement presents a substantial market opportunity for Dr. Reddy's. The 121-country coverage, focusing on low- and lower-middle-income markets, aligns with the company's strategic goal of reaching 1.5 billion patients by 2030. These markets, while price-sensitive, offer significant volume potential due to high HIV prevalence rates.

Investors should note that while initial returns may be modest due to the royalty-free nature of the agreement, the long-term benefits could be substantial. Dr. Reddy's will gain valuable experience in manufacturing and marketing a cutting-edge HIV treatment, potentially strengthening its position in the global pharmaceutical market.

The agreement's inclusion of future PrEP indications is particularly noteworthy. If approved, this could open up an entirely new market segment, as HIV prevention medications have shown strong demand growth in recent years. This forward-looking aspect of the deal demonstrates Dr. Reddy's commitment to long-term growth in the HIV therapeutics space.

HYDERABAD, India--(BUSINESS WIRE)-- Dr. Reddy’s Laboratories Ltd. (BSE: 500124, NSE: DRREDDY, NYSE: RDY, NSEIFSC: DRREDDY; along with its subsidiaries together referred to as “Dr. Reddy’s”), today announced that it has entered into a royalty-free non-exclusive voluntary licensing agreement with Gilead Sciences Ireland UC for the manufacture and commercialisation of the drug, Lenacapavir, in India and 120 other countries.

Lenacapavir is a United States Food and Drug Administration (USFDA) approved drug indicated for the treatment of human immunodeficiency virus type 1 (HIV-1) infection in heavily treatment-experienced adults with multidrug resistant HIV-1 infection failing their current antiretroviral regimen due to resistance, intolerance, or safety considerations. Additionally, Lenacapavir is currently under investigation for the prevention of HIV (PrEP) which is yet to be approved globally.

Gilead Sciences first launched Lenacapavir under the brand name Sunlenca® in the United States and Europe markets in the year 2022. It is a first-in-class HIV-1 capsid inhibitor.

Dr. Reddy’s has been granted a non-exclusive voluntary licence to manufacture Lenacapavir and market it in 120 countries, for the current approved indication of HIV treatment in heavily treatment-experienced (HTE) adults with multi-drug resistant HIV. Dr. Reddy's will be responsible for technology transfer at its manufacturing site, conducting bioequivalence/clinical studies, product registration and launch in the agreed markets. Additionally, the agreement grants licence to Dr. Reddy’s to manufacture and commercialise lenacapavir for the indication of prevention of HIV (PrEP) in 120 countries, if approved.

Deepak Sapra, Chief Executive Officer- API and Services, Dr. Reddy’s Laboratories Ltd., said: "Lenacapavir marks an important milestone for Dr. Reddy’s in patient access and affordability for pre and post exposure treatment of HIV. The collaboration with Gilead will help us make this latest treatment option available to patients in 120 primarily low- and lower- middle income countries, including in India. Many of these countries have a very high disease burden of HIV. This is an important endeavour in our journey to create impact on 1.5 billion patients by 2030."

About Lenacapavir:

Lenacapavir is approved in multiple countries for the treatment of adults with multi-drug resistant HIV in combination with other antiretrovirals. The use of lenacapavir for HIV prevention is investigational and the safety and efficacy of lenacapavir for this use have not been established.

The multi-stage mechanism of action of lenacapavir is distinguishable from other currently approved classes of antiviral agents. While most antivirals act on just one stage of viral replication, lenacapavir is designed to inhibit HIV at multiple stages of its lifecycle and has no known cross resistance exhibited in vitro to other existing drug classes.

Lenacapavir is being evaluated as a long-acting option in multiple ongoing and planned early and late-stage clinical studies in Gilead's HIV prevention and treatment research program. Lenacapavir is being developed as a foundation for potential future HIV therapies with the goal of offering both long-acting oral and injectable options with several dosing frequencies, in combination or as a mono agent, that help address individual needs and preferences of people and communities affected by HIV¹.

About Dr. Reddy’s: Dr. Reddy’s Laboratories Ltd. (BSE: 500124, NSE: DRREDDY, NYSE: RDY, NSEIFSC: DRREDDY) is a global pharmaceutical company headquartered in Hyderabad, India. Established in 1984, we are committed to providing access to affordable and innovative medicines. Driven by our purpose of ‘Good Health Can’t Wait’, we offer a portfolio of products and services including APIs, generics, branded generics, biosimilars and OTC. Our major therapeutic areas of focus are gastrointestinal, cardiovascular, diabetology, oncology, pain management and dermatology. Our major markets include – USA, India, Russia & CIS countries, China, Brazil and Europe. As a company with a history of deep science that has led to several industry firsts, we continue to plan ahead and invest in businesses of the future. As an early adopter of sustainability and ESG actions, we released our first Sustainability Report in 2004. Our current ESG goals aim to set the bar high in environmental stewardship; access and affordability for patients; diversity; and governance. For more information, log on to: www.drreddys.com.

Disclaimer: This press release may include statements of future expectations and other forward-looking statements that are based on the management’s current views and assumptions and involve known or unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may", "will", "should", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to without limitation, (i) general economic conditions such as performance of financial markets, credit defaults, currency exchange rates, interest rates, persistency levels and frequency / severity of insured loss events, (ii) mortality and morbidity levels and trends, (iii) changing levels of competition and general competitive factors, (iv) changes in laws and regulations and in the policies of central banks and/or governments, (v) the impact of acquisitions or reorganization, including related integration issues, and (vi) the susceptibility of our industry and the markets addressed by our, and our customers’, products and services to economic downturns as a result of natural disasters, epidemics, pandemics or other widespread illness, including coronavirus (or COVID-19), and (vii) other risks and uncertainties identified in our public filings with the Securities and Exchange Commission, including those listed under the "Risk Factors" and "Forward-Looking Statements" sections of our Annual Report on Form 20-F for the year ended March 31, 2024. The company assumes no obligation to update any information contained herein.

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¹ https://www.gilead.com/news/news-details/2024/gileads-twiceyearly-lenacapavir-for-hiv-prevention-reduced-hiv-infections-by-96-and-demonstrated-superiority-to-daily-truvada

View source version on businesswire.com: https://www.businesswire.com/news/home/20241002770433/en/

INVESTOR RELATIONS

RICHA PERIWAL

richaperiwal@drreddys.com

MEDIA RELATIONS

USHA IYER

USHAIYER@DRREDDYS.COM

Source: Dr. Reddy’s Laboratories Ltd.

FAQ

What is the new licensing agreement Dr. Reddy's (RDY) has signed for Lenacapavir?

Dr. Reddy's (RDY) has signed a royalty-free non-exclusive voluntary licensing agreement with Gilead Sciences Ireland UC to manufacture and commercialize Lenacapavir in India and 120 other countries.

What is Lenacapavir and what is it used for?

Lenacapavir is an FDA-approved drug for treating HIV-1 infection in heavily treatment-experienced adults with multidrug-resistant HIV-1. It's also under investigation for HIV prevention (PrEP).

In how many countries will Dr. Reddy's (RDY) be able to market Lenacapavir?

Dr. Reddy's (RDY) has been granted a license to manufacture and market Lenacapavir in India and 120 other countries, totaling 121 markets.

What are Dr. Reddy's (RDY) responsibilities under this new agreement?

Dr. Reddy's (RDY) will be responsible for technology transfer, manufacturing, conducting clinical studies, product registration, and launching Lenacapavir in the agreed markets.