Vonoprazan Fumarate

Net revenues of $16.4 million reported for the third quarter 2024 compared to $7.3 million in the second quarter 2024, over 120% sequential quarterly increaseOver 143,000 prescriptions filled for VOQUEZNA® (vonoprazan) products, launch to date, a 138% increase since last quarterly reportCommercial access for VOQUEZNA tablets expanded, now covering over 80% of U.S. commercial livesManagement to host conference call today, November 7, 2024, at 8:30 am ET FLORHAM PARK, N.J., Nov. 07, 2024 (GLOBE NEWSWIRE) -- Phathom Pharmaceuticals, Inc. (Nasdaq: PHAT), a biopharmaceutical company focused on developing and commercializing novel treatments for gastrointestinal (GI) diseases, today reported financial results for the third quarter of 2024, and provided recent business updates. “We are thrilled with Phathom’s progress over the past quarter, particularly the strong and continued momentum of the commercial launch for our first-in-class gastroesophageal reflux disease (GERD) treatment, VOQUEZNA,” said Terrie Curran, President and CEO of Phathom. “Demand from physicians and patients has been robust, and favorable payer coverage continues to expand, now reaching over an estimated 120 million U.S. commercially covered lives. These positive trends in prescription data, market sentiment, and patient access validate our launch strategies and reinforce our confidence in the potential of VOQUEZNA to displace standard of care proton pump inhibitors (PPIs). The recent approval for Non-Erosive GERD has greatly expanded our market opportunity, and the strong demand highlights the high unmet need in GERD treatment. Additionally, our successful $130 million equity raise further strengthens our ability to invest in the growth of the brand and we believe we remain well-positioned to deliver on VOQUEZNA’s blockbuster opportunity.” Recent Business Highlights and Third Quarter 2024 Results: VOQUEZNA Launch Progress: VOQUEZNA's commercial momentum continues to accelerate, bolstered by the July 2024 label expansion to include Non-Erosive GERD. Total filled prescriptions grew steadily throughout the third quarter, underscoring strong market adoption and positive feedback from both healthcare providers and patients. Launch to date through October 25, 2024, over 143,000 prescriptions for VOQUEZNA tablets, VOQUEZNA TRIPLE PAK®, and VOQUEZNA DUAL PAK® have been filled through both retail pharmacies and patient support at BlinkRx, an increase of 138% compared to 60,000 filled prescriptions as of the company’s last quarterly report. The sequential growth of prescriptions filled in the third quarter 2024 nearly doubled with over 69,000 prescriptions for VOQUEZNA products filled, compared to approximately 35,000 filled prescriptions in the second quarter 2024.As the launch progresses, VOQUEZNA’s prescriber base continues to expand with the number of VOQUEZNA prescribers growing to more than 13,600 cumulative prescribers as of October 18, 2024, up from 8,200 writers since the company’s last quarterly report, an increase of over 65%.Phathom has secured broad and favorable commercial coverage for VOQUEZNA, with access now expanded to over an estimated 120 million covered lives, representing over 80% of U.S. commercial lives. Recent Business and Regulatory Highlights: New data from multiple studies for first-in-class treatment VOQUEZNA were presented at the American College of Gastroenterology (ACG) 2024 Annual Meeting, held October 25-30 in Philadelphia, PA: A new analysis of data from the Phase 2 PHALCON-NERD-201 trial assessing additional clinical outcomes related to the efficacy of investigational As Needed (On-Demand) VOQUEZNA dosing compared to placebo for relieving episodic heartburn in Non-Erosive GERD patients following a 4-week daily VOQUEZNA run-in period was presented by Ronnie Fass, M.D. This research was recognized with the ACG Outstanding Research Award and highlighted the potential for transitioning from daily VOQUEZNA treatment to As Needed dosing of VOQUEZNA, showing symptom improvement within one hour of VOQUEZNA administration and sustained low heartburn burden in patients who switched to As Needed treatment after achieving control with daily use.In a poster presentation recognized with ACG’s prestigious Presidential Poster Award, an exploratory analysis from Phathom's Phase 3 Non-Erosive GERD study assessed the common yet infrequently evaluated nocturnal symptoms among Non-Erosive GERD patients. Patients with nighttime GERD prior to VOQUEZNA treatment reported significant and meaningful relief with VOQUEZNA daily dosing, further underscoring VOQUEZNA’s potent and long-lasting acid suppression and potential in addressing both daytime and nighttime heartburn. Phathom’s recent launch of VOQUEZNA for Non-Erosive GERD has begun to generate real-world data which is being reviewed to understand consumer usage patterns and prescribing habits of healthcare providers. These insights will help assess the value and potential timing for advancing a separate Phase 3 program to validate the As Needed dosing of VOQUEZNA for active heartburn episodes, building on the positive results from the company's prior Phase 2 study.Phathom is in the final stages of obtaining FDA feedback on the Phase 2 study and program investigating VOQUEZNA as a potential treatment for Eosinophilic Esophagitis (EoE) in adults and adolescents, with plans to now initiate the program in the first half of 2025. Third Quarter 2024 Financial Results: Revenue: Net revenues for the third quarter 2024 were $16.4 million related to sales of VOQUEZNA, VOQUEZNA TRIPLE PAK, and VOQUEZNA DUAL PAK. There were no revenues for the third quarter 2023 due to the launch of VOQUEZNA taking place in the fourth quarter 2023.Research and development (R&D) expenses: R&D expenses for the third quarter 2024 were $8.7 million, a decrease of $3.6 million compared to $12.3 million for the third quarter 2023. The decrease was a result of lower clinical trial expenses due to the wrap-up of activities related to the PHALCON-NERD-301 daily dosing study.Selling, general and administrative (SG&A) expenses: SG&A expenses for the third quarter 2024 were $76.1 million, an increase of $52.7 million compared to $23.4 million for the third quarter 2023. The increase was a result of higher personnel costs and increased activity related to the ongoing buildout of commercial infrastructure and marketing activity in support of the launch of VOQUEZNA products.Net loss: Net loss for the third quarter 2024 was $85.6 million, compared to $43.2 million for the third quarter 2023. Third quarter 2024 net loss included a non-cash charge related to stock-based compensation of $5.6 million compared to $6.1 million for the third quarter 2023. Non-GAAP adjusted net loss for the third quarter 2024 was $67.9 million compared to $30.8 million for the same period in 2023. These non-GAAP adjusted net losses, more fully described below under "Non-GAAP Financial Measures," exclude non-cash stock-based compensation charges, non-cash interest expense related to the accounting for our revenue interest financing liability, which are in excess of the actual interest owed, and interest expense related to the amortization of debt discount on our term loan. A reconciliation of the GAAP financial results to non-GAAP financial results is included in the tables below.Cash and cash equivalents: As of September 30, 2024, cash and cash equivalents were $334.7 million. Up to an additional $125 million is also available under the Company’s term loan with Hercules.Cash runway: Based on its current cash resources, operating plan, estimated product revenues, and potential funds available under its existing term loan, the company believes these resources will be sufficient to fund operations and enable Phathom to achieve cash flow positivity. Conference Call and WebcastPhathom will host a conference call and webcast to discuss its third quarter financial results and business highlights today, November 7, 2024, at 8:30 am ET. A live webcast will be available on the investors page of Phathom’s website under Events & Presentations. A replay of the webcast will be available following the completion of the event and will be archived for up to 90 days. Non-GAAP Financial MeasuresThis press release includes financial results prepared in accordance with accounting principles generally accepted in the United States (GAAP), and also certain non-GAAP financial measures. In particular, Phathom has provided non-GAAP adjusted net loss and adjusted net loss per share, adjusted to exclude the items below. Non-GAAP financial measures are not an alternative for financial measures prepared in accordance with GAAP. However, Phathom believes the presentation of non-GAAP adjusted net loss and adjusted net loss per share, when viewed in conjunction with GAAP results, provides investors with a more meaningful understanding of ongoing operating performance. These measures exclude (i) non-cash stock-based compensation, which is substantially dependent on changes in the market price of common shares, (ii) interest expense related to the accounting for our revenue interest financing liability, which are in excess of the actual interest owed, and (iii) interest expense related to the amortization of debt discount on our term loan. Phathom believes the presentation of these non-GAAP financial measures provides useful information to management and investors regarding Phathom's results of operations. When GAAP financial measures are viewed in conjunction with these non-GAAP financial measures, investors are provided with a more meaningful understanding of Phathom's ongoing operating performance and are better able to compare Phathom's performance between periods. In addition, these non-GAAP financial measures are among those indicators Phathom uses as a basis for evaluating performance, and planning and forecasting future periods. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for GAAP financial measures. A reconciliation between these non-GAAP measures and the most directly comparable GAAP measures is provided later in this press release. About Phathom Pharmaceuticals, Inc.Phathom Pharmaceuticals is a biopharmaceutical company focused on the development and commercialization of novel treatments for gastrointestinal diseases. Phathom has in-licensed the exclusive rights to vonoprazan, a first-in-class potassium-competitive acid blocker (PCAB) that is currently marketed in the United States as VOQUEZNA® (vonoprazan) tablets for the treatment of heartburn associated with Non-Erosive GERD in adults, the healing and maintenance of healing of Erosive GERD in adults and relief of associated heartburn, in addition to VOQUEZNA® TRIPLE PAK® (vonoprazan tablets, amoxicillin capsules, clarithromycin tablets) and VOQUEZNA® DUAL PAK® (vonoprazan tablets, amoxicillin capsules) for the treatment of H. pylori infection in adults. For more information about Phathom, visit the company’s website at www.phathompharma.com and follow on LinkedIn and X. Forward-Looking StatementsThis press release contains forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, including statements about the timing of commencement of the Phase 2 EoE study, our plans with respect to the value and potential timing for a separate Phase 3 program to validate As Needed dosing of VOQUEZNA for active heartburn episodes, the potential that VOQUEZNA can displace standard of care PPIs, and address unmet needs in GERD treatment, the availability of additional funds under our term loan agreement, future growth in demand and our ability to secure additional commercial coverage for our products, and our ability to achieve cash flow positivity. The inclusion of forward-looking statements should not be regarded as a representation by Phathom that any of its plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in Phathom’s business, including, without limitation: we may not be able to successfully commercialize VOQUEZNA, VOQUEZNA TRIPLE PAK and VOQUEZNA DUAL PAK, which will depend on a number of factors including coverage and reimbursement levels from governmental authorities and health insurers as well as market acceptance by healthcare providers; we may use our capital resources sooner than expected, or our operating plan may overestimate our expected product revenues, which could require us to reduce expenses or raise additional capital sooner than expected; the inherent risks of clinical development of vonoprazan; Phathom’s dependence on third parties in connection with product manufacturing, research and preclinical and clinical testing; regulatory developments in the United States and foreign countries; unexpected adverse side effects or inadequate efficacy of vonoprazan that may limit its development, regulatory approval and/or commercialization, or may result in recalls or product liability claims; Phathom’s ability to obtain and maintain intellectual property protection and non-patent regulatory exclusivity for vonoprazan; Phathom’s estimates regarding patient population and commercial coverage could prove to be inaccurate; and other risks described in the Company’s prior press releases and the Company’s filings with the Securities and Exchange Commission (SEC), including under the heading “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and Phathom undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. MEDIA CONTACTNick Benedetto1-877-742-8466media@phathompharma.com INVESTOR CONTACTEric Sciorilli1-877-742-8466ir@phathompharma.com © 2024 Phathom Pharmaceuticals. All rights reserved.VOQUEZNA, VOQUEZNA DUAL PAK, VOQUEZNA TRIPLE PAK, Phathom Pharmaceuticals, and their respective logos are registered trademarks of Phathom Pharmaceuticals, Inc. Selected Condensed Balance Sheets(in thousands)(unaudited) September 30,2024 December 31,2023Assets Cash and cash equivalents $334,678 $381,393 Total assets $387,044 $413,842 Total liabilities $574,156 $486,601 Total stockholders’ deficit $(187,112) $(72,759) Statements of Operations and Comprehensive Loss(in thousands, except share and per share amounts)(unaudited) Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2024 2023 2024 2023 Product revenue, net $16,352 $- $25,588 $- Cost of revenue 2,356 - 4,158 - Gross profit 13,996 - 21,430 - Operating expenses: Research and development 8,693 12,263 25,499 36,505 Selling, general and administrative 76,099 23,396 213,981 60,932 Total operating expenses 84,792 35,659 239,480 97,437 Loss from operations (70,796) (35,659) (218,050) (97,437)Other income (expense): Interest income 3,711 2,720 11,648 4,528 Interest expense (18,484) (10,107) (53,416) (28,939)Other expense, net (8) (197) (57) (174)Total other expense (14,781) (7,584) (41,825) (24,585)Net loss and comprehensive loss $(85,577) $(43,243) $(259,875) $(122,022)Net loss per share, basic and diluted $(1.32) $(0.76) $(4.29) $(2.48) Reconciliation of GAAP to Non-GAAP Financial Measures(in thousands, except share and per share amounts)(unaudited) Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2024 2023 2024 2023 Reconciliation of GAAP to Non-GAAP adjusted net loss: GAAP net loss($85,577) ($43,243) ($259,875) ($122,022) Stock-based compensation expense (A) 5,635 6,140 17,360 20,441 Non-cash interest on revenue interest financing liability 11,503 5,715 35,012 16,265 Interest expense related to amortization of debt discount 589 542 1,563 1,311 Non-GAAP adjusted net loss($67,850) ($30,846) ($205,940) ($84,005) Reconciliation of GAAP to Non-GAAP adjusted net loss per share — basic and diluted: GAAP net loss per share — basic and diluted($1.32) ($0.76) ($4.29) ($2.48) Stock-based compensation expense (A) 0.08 0.11 0.28 0.41 Non-cash interest on revenue interest financing liability 0.18 0.10 0.58 0.33 Interest expense related to amortization of debt discount 0.01 0.01 0.03 0.03 Non-GAAP net loss per share — basic and diluted($1.05) ($0.54) ($3.40) ($1.71) Weighted-average shares of common stock outstanding, basic and diluted 64,627,847 56,782,379 60,543,545 49,265,321 (A) Stock-based compensation consists of the following: Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2024 2023 2024 2023Research and development1,296 1,397 3,876 4,977Selling, general and administrative4,339 4,743 13,484 15,464

HYDERABAD, India--( BUSINESS WIRE )--Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY | NSEIFSC: DRREDDY) today announced its consolidated financial results for the quarter and half year ended September 30, 2024. The information mentioned in this release is based on consolidated financial statements under International Financial Reporting Standards (IFRS). Q2FY25 H1FY25 Revenues ₹ 80,162 Mn [Up: 17% YoY; 4% QoQ] ₹ 156,889 Mn [Up: 15% YoY] Gross Margin 59.6% [Q2FY24: 58.7%; Q1FY25: 60.4%] 60.0% [H1FY24: 58.7%] SG&A Expenses ₹ 23,007 Mn [Up: 22% YoY; 1% QoQ] ₹ 45,698 Mn [Up: 25% YoY] R&D Expenses ₹ 7,271 Mn [9.1% of Revenues] ₹ 13,464 Mn [8.6% of Revenues] EBITDA ₹ 22,803 Mn [28.4% of Revenues] ₹ 44,402 Mn [28.3% of Revenues] Profit before Tax ₹ 19,167 Mn [Flat YoY; Up: 2% QoQ] ₹ 37,988 Mn [Up: 1% YoY] Profit after Tax before Non-Controlling Interest ₹ 13,415 Mn [Down: 9% YoY; 4% QoQ] ₹ 27,335 Mn [Down: 5% YoY] Profit after Tax attributable to Equity Holders ₹ 12,553 Mn [Down: 15% YoY; 10% QoQ] ₹ 26,473 Mn [Down: 8% YoY] Commenting on the results, Co-Chairman & MD, G V Prasad said: “We delivered another good quarter and maintained the growth momentum across businesses. We made progress on our future growth drivers, operationalized our venture with Nestlé and completed the acquisition of Nicotinell ® and related brands. We will continue to drive efficiency, strengthen our core businesses, and positively impact patient lives through science and innovation.” All amounts in millions, except EPS All US dollar amounts based on convenience translation rate of 1 USD = ₹83.76 Dr. Reddy’s Laboratories Limited & Subsidiaries Revenue Mix by Segment for the quarter Particulars Q2FY25 Q2FY24 YoY Gr % Q1FY25 QoQ Gr% (₹) (₹) (₹) Global Generics 71,576 61,084 17 68,858 4 North America 37,281 31,775 17 38,462 (3) Europe 5,770 5,286 9 5,265 10 India 13,971 11,860 18 13,252 5 Emerging Markets 14,554 12,163 20 11,878 23 Pharmaceutical Services and Active Ingredients (PSAI) 8,407 7,034 20 7,657 10 Others 179 684 (74) 212 (16) Total 80,162 68,802 17 76,727 4 Revenue Mix by Segment for the half year Particulars H1FY25 H1FY24 YoY Gr% (₹) (₹) Global Generics 140,434 121,167 16 North America 75,743 63,776 19 Europe 11,035 10,333 7 India 27,223 23,342 17 Emerging Markets 26,433 23,716 11 PSAI 16,064 13,743 17 Others 391 1,276 (69) Total 156,889 136,186 15 Consolidated Income Statement for the quarter Particulars Q2FY25 Q2FY24 YoY Gr % Q1FY25 QoQ Gr% ($) (₹) ($) (₹) ($) (₹) Revenues 957 80,162 821 68,802 17 916 76,727 4 Cost of Revenues 387 32,393 339 28,434 14 363 30,383 7 Gross Profit 570 47,769 482 40,368 18 553 46,344 3 % of Revenues 59.6% 58.7% 60.4% Selling, General & Administrative Expenses 275 23,007 224 18,795 22 271 22,691 1 % of Revenues 28.7% 27.3% 29.6% Research & Development Expenses 87 7,271 65 5,447 33 74 6,193 17 % of Revenues 9.1% 7.9% 8.1% Impairment of Non-Current Assets, net 11 924 1 55 1580 0 5 Other (Income)/Expense, net (12) (984) (21) (1,796) (45) (6) (470) 109 Results from Operating Activities 210 17,551 213 17,867 (2) 214 17,925 (2) Finance (Income)/Expense, net (19) (1,555) (15) (1,225) 27 (10) (837) 86 Share of Profit of Equity Accounted Investees, net of tax (1) (61) (1) (42) 45 (1) (59) 3 Profit before Income Tax 229 19,167 228 19,134 0 225 18,821 2 % of Revenues 23.9% 27.8% 24.5% Income Tax Expense 69 5,752 52 4,334 33 59 4,901 17 Profit for the Period 160 13,415 177 14,800 (9) 166 13,920 (4) % of Revenues 16.7% 21.5% 18.1% Attributable to Equity holders of the parent company 150 12,553 177 14,800 (15) 166 13,920 (10) Attributable to Non-controlling interests 10 862 - - - - - - Diluted Earnings per Share (EPS)^ 0.18 15.04 0.21 17.76 (15) 0.20 16.69 (9) ^Historical numbers re-casted basis the increased number of shares post share split EBITDA Computation for the quarter Particulars Q2FY25 Q2FY24 Q1FY25 ($) (₹) ($) (₹) ($) (₹) Profit before Income Tax 229 19,167 228 19,134 225 18,821 Interest (Income) / Expense, net* (15) (1,262) (14) (1,166) (12) (1,037) Depreciation 31 2,629 29 2,437 30 2,508 Amortization 16 1,346 16 1,353 16 1,302 Impairment 11 924 1 55 0 5 EBITDA 272 22,803 260 21,813 258 21,599 % of Revenues 28.4% 31.7% 28.2% *Includes income from Investment Consolidated Income Statement for the half year Particulars H1FY25 H1FY24 YoY Gr % ($) (₹) ($) (₹) Revenues 1,873 156,889 1,626 136,186 15 Cost of Revenues 749 62,776 672 56,265 12 Gross Profit 1,124 94,113 954 79,921 18 % of Revenues 60.0% 58.7% Selling, General & Administrative Expenses 546 45,698 436 36,497 25 % of Revenues 29.1% 26.8% Research & Development Expenses 161 13,464 125 10,431 29 % of Revenues 8.6% 7.7% Impairment of Non-Current Assets, net 11 929 1 66 1308 Other (Income)/Expense, net (17) (1,454) (31) (2,576) (44) Results from Operating Activities 424 35,476 424 35,503 (0) Finance (Income)/Expense, net (29) (2,392) (24) (2,009) 19 Share of Profit of Equity Accounted Investees, net of tax (1) (120) (1) (85) 41 Profit before Income Tax 454 37,988 449 37,597 1 % of Revenues 24.2% 27.6% Income Tax Expense 127 10,653 105 8,772 21 Profit for the Period 326 27,335 344 28,825 (5) % of Revenues 17.4% 21.2% Attributable to Equity holders of the parent company 316 26,473 344 28,825 (8) Attributable to Non-controlling interests 10 862 - - - Diluted Earnings per Share (EPS)^ 0.39 31.73 0.41 34.58 (8) ^ Historical numbers re-casted basis the increased number of shares post share split EBITDA Computation for the half year Particulars H1FY25 H1FY24 ($) (₹) ($) (₹) Profit before Income Tax 454 37,988 449 37,597 Interest (Income) / Expense, net* (27) (2,300) (22) (1,851) Depreciation 61 5,137 56 4,718 Amortization 32 2,648 32 2,656 Impairment 11 929 1 66 EBITDA 530 44,402 516 43,186 % of Revenues 28.3% 31.7% Key Balance Sheet Items Particulars As on 30 th Sep 2024 As on 30 th Jun 2024 As on 30 th Sep 2023 ($) (₹) ($) (₹) ($) (₹) Cash and Cash Equivalents and Other Investments 767 64,274 1,141 95,599 833 69,784 Trade Receivables 1,008 84,398 968 81,088 832 69,722 Inventories 860 72,039 819 68,568 676 56,592 Property, Plant, and Equipment 1,035 86,693 959 80,343 841 70,478 Goodwill and Other Intangible Assets 1,240 103,892 494 41,374 493 41,278 Loans and Borrowings (Current & Non-Current) 580 48,540 366 30,675 158 13,230 Trade Payables 427 35,776 407 34,109 364 30,485 Equity 3,692 309,283 3,518 294,627 3,022 253,086 Key Business Highlights [for Q2FY25] Completed acquisition of the Nicotine Replacement Therapy (‘NRT’) portfolio outside of the United States and paid upfront cash consideration of GBP 458 million. Operationalized, Dr. Reddy’s and Nestlé Health Science Limited , in August 2024 to undertake the business of nutraceutical products and supplements in India and Nepal. 49% of the shares in the subsidiary transferred to Nestlé India. Secured Marketing Authorization from European Commission for our rituximab biosimilar, following a positive opinion from the CHMP of the European Medicines Agency. Received approval from the USFDA for Investigational New Drug (IND) application for AUR-112 , a highly differentiated potent and selective inhibitor of MALT1, being developed for treatment of lymphoid malignancies . Entered into a non-exclusive patent licensing agreement with Takeda to commercialise Vonoprazan , a novel gastrointestinal drug, in India. ESG & other Updates [for Q2FY25] Recognised amongst ‘Top 15’ India's Most Sustainable Companies , 2024 by Businessworld India Received ‘ESG Excellence Award’ 2024 in the ‘Large-cap Pharmaceuticals & Healthcare’ category by KPMG India ‘Voluntary Action Indicated’ (VAI) classification by the United States Food and Drug Administration ( USFDA ) for two of our formulations manufacturing facilities in Duvvada, Visakhapatnam (FTO 7 and FTO 9), following their routine GMP inspection in May 2024 as well as our API manufacturing facility (CTO-6) in Srikakulam, Andhra Pradesh , following their GMP Inspection in June 2024. Product-specific Pre-Approval Inspection ( PAI ) completed by the USFDA at our formulations manufacturing facility ( FTO SEZ PU1 ) in Srikakulam, Andhra Pradesh in August 2024 and issued a Form 483 with three observations. The response to the observations were submitted within stipulated timelines. Routine Good Manufacturing Practice (GMP) inspection concluded by the USFDA at our R&D centre in Bachupally, Hyderabad in September, 2024, with zero observations . Alteration in share capital of the Company by sub-division/ split of existing equity shares of face value of ₹5 each, fully paid up, including the American Depository Shares, into 5 equity shares of ₹1 each, fully paid-up, approved by the shareholders as well as the Board of Directors of the Company. Revenue Analysis Q2FY25 consolidated revenues at ₹80.2 billion, YoY growth of 17% and sequential growth of 4%. YoY growth was primarily driven by growth in global generics revenues. QoQ growth was primarily driven by global generics revenues in Emerging Markets, India, Europe as well as PSAI. H1FY25 consolidated revenues at ₹156.9 billion, YoY growth of 15%. The growth was driven by strong performances in global generics in North America, India, Emerging Markets as well as PSAI. Global Generics (GG) Q2FY25 revenues at ₹71.6 billion, YoY growth of 17% and QoQ growth of 4%. YoY growth was broad-based, driven by improved sales volumes and new product launches. Sequential growth was primarily driven by Emerging Markets and Europe. H1FY25 revenues at ₹140.4 billion, a YoY growth of 16%. The growth was across all markets, driven by increase in sales volumes. North America Q2FY25 revenues at ₹37.3 billion, YoY growth of 17% and QoQ decline of 3%. YoY growth was largely on account of increase in sales volumes, partly offset by price erosion. Sequential decline was due to decrease in sales volumes. H1FY25 revenues at ₹75.7 billion, YoY growth of 19%. The growth was largely on account of increase in sales volumes, partially offset by price erosion. During the quarter, we launched four new products in the region, all of which were launched in the U.S. A total of 7 products were launched during the half year ended September 30, 2024. During the quarter, we filed two new Abbreviated New Drug Applications (ANDAs) with the USFDA, taking our year-to-date ANDA filing count to three. As of September 30, 2024, 80 generic filings were pending approval from the USFDA. These comprise of 75 ANDAs and five New Drug Applications (NDAs) filed under Section 505(b)(2) route of the US Federal Food, Drug, and Cosmetic Act. Of the 75 ANDAs, 44 are Paragraph IV applications, and we believe that 22 of these have the ‘First to File’ status. Europe Q2FY25 revenues at ₹5.8 billion, YoY growth of 9% and QoQ growth of 10%. YoY growth was primarily on account of leveraging the portfolio to launch new products, partly offset by price erosion. QoQ growth was primarily on account of new product launches. - Germany at ₹3.2 billion, YoY growth of 21% and QoQ growth of 16%. - UK at ₹1.6 billion, YoY decline of 7% and QoQ growth of 3%. - Rest of Europe at ₹0.9 billion, YoY growth of 4% and QoQ growth of 2%. H1FY25 revenues at ₹11.0 billion, YoY growth of 7%. The growth was primarily on account of new product launches and momentum in base business, partly offset by price erosion. - Germany at ₹6.0 billion, YoY growth of 17%. - UK at ₹3.2 billion, YoY decline of 7%. - Rest of Europe at ₹1.8 billion, YoY growth of 2%. During the quarter, we launched 8 new products in the region, taking the year-to-date total to 20. India Q2FY25 revenues at ₹14.0 billion, YoY growth of 18% and QoQ growth of 5%. YoY growth was led by revenues from the vaccine portfolio in-licensed from Sanofi, new products launched as well as price increases. QoQ growth was on account of increase in sales volumes and price, as well as new product launches. As per IQVIA, our IPM rank was maintained at 10 for the quarter. H1FY25 revenues at ₹27.2 billion, YoY growth of 17%. YoY growth was largely on account of revenues from in-licensed vaccine portfolio, new products launched as well as higher prices. During the quarter, we launched three new brands in the country, taking the year-to-date total to 16. We also integrated the nutraceutical products under our subsidiary, ‘Dr. Reddy’s and Nestlé Health Science Limited’ during the quarter. Emerging Markets Q2FY25 revenues at ₹14.6 billion, YoY growth of 20% and QoQ growth of 23%. YoY growth is attributable to market share expansion as well as new product launches. QoQ growth was primarily due to higher volumes in the base business. - Revenues from Russia at ₹6.9 billion, YoY growth of 18% and QoQ growth of 24%. - YoY growth was due to higher sales volumes and price and new product launches, partly offset by unfavorable currency exchange rate movements. - QoQ growth was largely on account of market share expansion. - Revenues from other Commonwealth of Independent States (CIS) countries and Romania at ₹2.1 billion, YoY decline of 2% and QoQ growth of 12%. - YoY decline was primarily on account of decline in base business volumes. - QoQ growth was largely driven by higher base business volumes and increase in prices. - Revenues from Rest of World (RoW) territories at ₹5.6 billion, YoY growth of 32% YoY and QoQ growth of 26%. - YoY growth was due to momentum in base business and contribution from new products. - QoQ growth was largely driven by increase in base business volumes. H1FY25 revenues at ₹26.4 billion, YoY growth of 11%. The growth is attributable to market share expansion and new product launches, partly offset by unfavorable forex. - Revenues from Russia at ₹12.4 billion, YoY growth of 9%. The growth was largely on account of price increases in certain brands and improved volumes, partially offset by unfavorable currency exchange rate movements. - Revenues from other CIS countries and Romania at ₹4.1 billion, YoY decline of 2%. The decline was largely on account of lower sales volumes. - Revenues from RoW territories at ₹10.0 billion, YoY growth of 22%. The growth is largely attributable to higher base business volumes and new product launches. During the quarter, we launched 22 new products across various countries in the region, taking the year-to-date total to 39. Pharmaceutical Services and Active Ingredients (PSAI) Q2FY25 revenues at ₹8.4 billion, YoY growth of 20% and QoQ growth of 10%. YoY and QoQ growth was mainly driven by momentum in base business volumes, growth in services business and revenues from new products. H1FY25 revenues at ₹16.1 billion, with a growth of 17% YoY. The growth was mainly driven by market share expansion, growth in services business and revenues from new products. During the quarter, we filed 22 Drug Master Files (DMFs) globally, taking the year-to-date count to 36. Income Statement Highlights: Gross Margin Q2FY25 at 59.6% (GG: 63.1%, PSAI: 30.0%), a YoY increase of 92 basis points (bps) and a QoQ decline of 81 bps. The YoY increase was on account of improvement in product mix and overhead leverage, partly offset by price erosion. On a sequential basis, the decline was primarily on account of change in mix. H1FY25 at 60.0% (GG: 63.9%, PSAI: 26.7%), a YoY increase by 130 bps YoY. The expansion in margin was on account of favourable product mix and productivity cost savings, partially offset by price erosion in select markets. Selling, General & Administrative (SG&A) Expenses Q2FY25 at ₹23.0 billion, YoY increase of 22% and QoQ increase of 1%. We incurred one-time acquisition related costs towards NRT portfolio. Excluding the same, SG&A spend was at 28% of sales. H1FY25 at ₹45.7 billion, YoY increase of 25%. The increase is largely on account of higher investments in sales & marketing activities to strengthen our existing brands, new business initiatives, including scaling up ‘Over-the-Counter’ (OTC) and consumer health businesses, as well as higher personnel and freight expenses. Research & Development (R&D) Expenses Q2FY25 at ₹7.3 billion. As % to Revenues – Q2FY25: 9.1% | Q2FY24: 7.9% | Q1FY25: 8.1%. H1FY25 at ₹13.5 billion. As % to Revenues – H1FY25: 8.6% | H1FY24: 7.7%. R&D investments is related to our ongoing development efforts across generics, biosimilars, as well as our novel oncology assets. Other Operating Income Q2FY25 at ₹1.0 billion as compared to ₹ 1.8 billion in Q2FY24. H1FY25 at ₹1.5 billion as compared to ₹ 2.6 billion in H1FY24. Net Finance Income Q2FY25 at ₹1.6 billion compared to ₹1.2 billion in Q2FY24. H1FY25 at ₹2.4 billion as compared to ₹2.0 billion in H1FY24. Profit before Tax Q2FY25 at ₹19.2 billion, flat YoY and a QoQ growth of 2%. As % to Revenues – Q2FY25: 23.9% | Q2FY24: 27.8% | Q1FY25: 24.5%. Excluding the impact of aforesaid mentioned one-time acquisition related cost and impairment charge on non-current assets; underlying profit before tax stood at 25.7% of revenues. H1FY25 at ₹38.0 billion, a YoY increase of 1%. As % to Revenues – H1FY25: 24.2% | H1FY24: 27.6%. Income Tax Q2FY25 at ₹5.8 billion. As % to PBT – Q2FY25: 30% | Q2FY24: 22.7% | Q1FY25: 26%. The higher tax for the quarter is on account of reversal of a Deferred Tax Asset of Rs. 0.48 billion, created in earlier period on land, pursuant to the amendment in the Finance Act 2024, resulting in withdrawal of indexation benefit. Excluding the impact of this one-time reversal, adjusted effective tax rate for the quarter on the underlying PBT is 25.9%. H1FY25 : The ETR was 28.0% as compared to 23.3% in H1FY24. Profit after Tax before Non-Controlling Interests Q2FY25 at ₹13.4 billion, a YoY decline of 9% and a QoQ decline of 4%. As % to Revenues – Q2FY25: 16.7% | Q2FY24: 21.5% | Q1FY25: 18.1%. Excluding the impact of one-time acquisition related cost, impairment charge on non-current assets, one-time tax expense, underlying profit after tax before non-controlling interests stood at 18.0% of revenues. H1FY25 at ₹27.3 billion, a YoY decline of 5%. As % to Revenues – H1FY25: 17.4% | H1FY24: 21.2%. Non-Controlling Interests (NCI) Q2FY25 at ₹0.9 billion. This primarily includes the share in a one-time deferred tax asset recognized in the subsidiary books (Dr. Reddy’s and Nestlé Health Science Limited) on account of transfer of Dr. Reddy’s nutraceuticals business to the subsidiary and consequently allocated to NCI. Profit attributable to Equity Holders of Parent Company Q2FY25 at ₹12.6 billion, a YoY decline of 15% and a QoQ decline of 10%. As % to Revenues – Q2FY25: 15.7% | Q2FY24: 21.5% | Q1FY25: 18.1%. Excluding the impact of one-time acquisition related cost, impairment charge on non-current assets, one-time tax expense, underlying profit after tax attributable to equity holders of parent company stood at 19% of revenues. H1FY25 at ₹26.5 billion, a YoY decline of 8%. As % to Revenues – H1FY25: 16.9% | H1FY24: 21.2%. Diluted Earnings per Share (EPS) Q2FY25 is ₹15.04. H1 FY25 is ₹31.73. The Earnings per share has been arrived at on the increased number of shares pursuant to the stock split of one fully paid-up equity share of Rupees five each into five fully paid-up equity share of Rupee one each. Other Highlights: Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) Q2FY25 at ₹22.8 billion, YoY growth of 5% and QoQ growth of 6%. As % to Revenues – Q2FY25: 28.4% | Q2FY24: 31.7% | Q1FY25: 28.2%. Excluding the impact of one-time acquisition related cost, EBITDA stood at 29.1% of sales. H1FY25 at ₹44.4 billion, a YoY growth of 3%. As % to Revenues – H1FY25: 28.3% | H1FY24: 31.7%. Others: Operating Working Capital: As on 30 th September 2024 at ₹120.7 billion. Capital Expenditure: Q2FY25 at ₹7.4 billion. Free Cash Flow: Q2FY25 at ₹2.0 billion. Net Cash Surplus: As on 30 th September 2024 at ₹18.9 billion Debt to Equity: As on 30 th September 2024 is (0.06) ROCE: Q2FY25 at 28.5% (Annualized) About key metrics and non-GAAP Financial Measures This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP financial measures are measures of our historical performance, financial position or cash flows that are adjusted to exclude or include amounts from the most directly comparable financial measure calculated and presented in accordance with IFRS. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with IFRS. Our non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. These measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We believe these non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating our business. For more information on our non-GAAP financial measures and a reconciliation of GAAP to non-GAAP measures, please refer to " Reconciliation of GAAP to Non-GAAP Results " table in this press release. All amounts in millions, except EPS Reconciliation of GAAP Measures to Non-GAAP Measures Operating Working Capital Particulars As on 30 th Sep 2024 ( ₹ ) Inventories 72,039 Trade Receivables 84,398 Less: Trade Payables 35,776 Operating Working Capital 120,661 Free Cash Flow Particulars Three months ended 30 th Sep 2024 ( ₹ ) Net cash generated from operating activities 16,538 Less: Taxes (7,223) Investments in Property, Plant & Equipment, and Intangibles (7,279) Free Cash Flow before Acquisitions 2,036 Less: Acquisitions related Pay-out (51,442) Free Cash Flow (49,406) Net Cash Surplus and Debt to Equity Particulars As on 30 th Sep 2024 ( ₹ ) Cash and Cash Equivalents 11,330 Investments 52,944 Short-term Borrowings (40,021) Long-term Borrowings, Non-Current (7,361) Less: Restricted Cash Balance – Unclaimed Dividend and others 177 Lease liabilities (included in Long-term Borrowings, Non-Current) (3,561) Equity Investments (Included in Investments) 1,388 Net Cash Surplus 18,888 Equity 309,283 Net Debt/Equity (0.06) Computation of Return on Capital Employed Particulars As on 30 th Sep 2024 ( ₹ ) Profit before Tax 19,167 Less: Interest and Investment Income (Excluding forex gain/loss) 1,262 Earnings Before Interest and taxes [A] 17,905 Average Capital Employed [B] 250,862 Annualized Return on Capital Employed (A/B) (Ratio) 28.5% Computation of Capital Employed: Particulars As on Sep 30, 2024 Mar 31, 2024 Property Plant and Equipment 86,693 76,886 Intangibles 92,119 36,951 Goodwill 11,773 4,253 Investment in Equity Accounted Associates 4,779 4,196 Other Current Assets 28,217 22,560 Other Investments 1,200 1,059 Other Non-Current Assets 1,510 1,632 Inventories 72,039 63,552 Trade Receivables 84,398 80,298 Derivative Financial Instruments 63 (299) Less: Other Liabilities 47,840 46,866 Provisions 5,260 5,444 Trade payables 35,776 30,919 Operating Capital Employed 293,865 207,859 Average Capital Employed 250,862 Computation of EBITDA Refer page no. 3 & 4. Earnings Call Details The management of the Company will host an Earnings call to discuss the Company’s financial performance and answer any questions from the participants. Date: November 5, 2024 Time: 19:30 pm IST | 09:00 am ET Conference Joining Information Option 1: Pre-register with the below link and join without waiting for the operator https://services.choruscall.in/DiamondPassRegistration/register?confirmationNumber=2636091&linkSecurityString=1174e664fe Option 2: Join through below Dial-In Numbers Universal Access Number: +91 22 6280 1219 +91 22 7115 8120 International Toll-Free Number: USA: 1 866 746 2133 UK: 0 808 101 1573 Singapore: 800 101 2045 Hong Kong: 800 964 448 No password/pin number is necessary to dial in to any of the above numbers. The operator will provide instructions on asking questions before and during the call. Play Back: The play back will be available after the earnings call, till November 11 th , 2024. For play back dial in phone No: +91 22 7194 5757, and Playback Code is 03706. Transcript: Transcript of the Earnings call will be available on the Company’s website: www.drreddys.com 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 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.” The company assumes no obligation to update any information contained herein.