Novartis discontinues development of Dr Reddy’s compound

Our Corporate Bureau
24 January 2003

Hyderabad: Global pharmaceutical giant Novartis has announced its decision “to discontinue further development of DRF-4158,” an insulin sensitiser compound for type-2 diabetes.

Dr Reddy’s had out-licensed DRF-4158 to Novartis during May 2001 for development and commercialisation of the compound in return for an upfront payment of $5 million.

The exact reasons for Novartis’ decision to terminate the clinical trials on DRF-4158 are not known.

Reacting sharply to the development, the stock markets pulled down Dr Reddy’s scrip by Rs 43.90 on 23 January 2003, a dip of 4.6 per cent. The scrip, which opened at Rs 948.90 on the National Stock Exchange (NSE), closed at Rs 905. During the day, the scrip went down as low as Rs 883.80. As many as 4.93 lakh shares were traded on the NSE alone, involving Rs 45.16 crore.

In a press release, Dr Reddy’s said: “Novartis will continue its collaboration with Dr Reddy’s for an additional dual acting insulin sensitiser compound.”