Dr Reddy's Labs was wracked with volatility on Thursday after news trickled in that Novartis had decided to discontinue further development of DRF 4158.

The news caught the scrip of the domestic pharma major in the torrent down , as it fell 2.5% to Rs 925. In fact, it had fallen as much as 4.4% to Rs 907, just prior to the news and even lower to Rs 885.65 earlier in the day.

The scrip had rallied in the last few trading sessions after having come off prior to that. The scrip's easing was partly on concerns that Novartis was moving towards its latest action on DRF 4158 . The scrip hit Rs 1,000.45 on 16 January 2003, but declined thereafter to Rs 949.20 as the market became wary of the negative news developing.

DRL today said that Novartis has decided to discontinue further development of DRF 4158. DRL had licenced the anti-diabetes compound DRF 4158 to Novartis in May 2001.

It, however, said that Novartis will collaborate with it for an additional dual-acting insulin sensitizer compound. Under the terms of this agreement, Novartis has rights for an additional development compound that is a dual acting insulin sensitizer, DRL said. The terms and conditions of the original agreement remain unchanged. The company also intends to carry out additional pre-clinical studies to determine the appropriate development path for the molecule.

DRL had received a setback earlier as well on the new drug development front. In July 2002, Novo Nordisk decided to suspend the clinical development of its dual acting insulin sensitiser Ragaglitazar (DRF 2725). The molecule was licensed out by Dr Reddy's Laboratories to Novo Nordisk in August 1998. Novo had discontinued development of DRF 2725 since tumours were seen in rats and in mice, after these animals were exposed to the drug for a period of time . Novo had then said that the rat findings in the clinical trials of ragaglitazar were not alarming, but it stopped the trials as it was unethical to continue the same.

Meanwhile, DRL with a view to strengthening its position in the urology segment, recently launched a drug called tolterodine tartrate for the treatment of urinary incontinence. Dr Reddy's will market under the brand name Torq. The product will be available in 1 mg and 2 mg tablet form.

Early January 2003, Dr Reddys commenced shipment of prescription ibuprofen tablets 400, 600 and 800 mg to the United States . Ibuprofen is the first generic product to be marketed under the Dr Reddys label. The company said the direct marketing of ibuprofen Rx was the first step in building the company's commercial organisation in the US. Ibuprofen is the generic version of Pharmacias Motrin, which had sales of about $ 290 million in the US in 2001.

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