Dr Reddy’s may mop up $300 million in Sputnik V sales

(This story originally appeared in on Apr 14, 2021)

Dr Reddy’s Laboratories (DRL), which received permission from India’s drug regulator to import the Sputnik V vaccine, could potentially mop up around $300 million from its initial sales.

The company has exclusive marketing and distribution rights for the first 250 million doses of Sputnik V vaccines in the country. This is assuming a base price of around Rs 150 per dose, the price at which the other two vaccines — Serum Institute’s Covishield and Bharat Biotech’s Covaxin — have been procured by government, analysts say.

DRL’s scrip, which witnessed a lot of action over the past few days, went down by over 4% on Tuesday to close at Rs 4,781 on the BSE. This may be because of uncertainty in the vaccine’s price, and lack of clarity over the launch as negotiations could take some time, and are tricky. The global price of Sputnik V is $10 (Rs 750).

DRL is readying its launch strategy and more details will emerge soon, a company executive told TOI. Though negotiations on pricing could take a few weeks, the launch is expected over the next few months after DRL starts imports in May-June.

The ramp-up in capacity will happen once the five contract manufacturers start producing in the country. Overall, a total of 852 million doses of Sputnik V will be produced in India alone over a year.

At present, pricing and distribution of the vaccine is controlled by the government. Later, the opening up of vaccine distribution to the private market may lead to better pricing and margins for DRL, a note from broking firm Motilal Oswal added.

The Hyderabad-based company had partnered with Russian Direct Investment Fund (RDIF), which is backing the vaccine, in September to conduct clinical trials of Sputnik V and distribute the vaccine in India.

DRL conducted phase II trials on 100 volunteers and a phase III study on 1,500 volunteers in India as part of a bridging study to a larger global phase III study.

When contacted, both DRL and RDIF did not comment on the pricing. Sputnik V uses two different vectors for the two shots in a course of vaccination, with an efficacy of around 91%.

While Sputnik V is registered in 55 countries, interestingly, according to Bloomberg reports, Russia has vaccinated only around 4.6 million people (about 3.2% of its population).

Trials are also under way for a Sputnik V and Oxford combined vaccine to study the immunogenicity and efficacy of combined use of the two vaccines.


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