Dr. Reddy's Laboratories Ltd asked to pay $462.5 mn to Hatchtech Pty Ltd

Dr. Reddy's Laboratories Ltd has announced about the receipt of an arbitration award issued by the International Center for Dispute Resolution, U.S., whereby a subsidiary of Dr. Reddy's Laboratories Limited (the Company) has been asked to pay an amount of US$46.25 mn (towards milestones, interest and fees) to Hatchtech Pty Ltd., in relation to the asset purchase agreement entered into between the parties in 2015.

On July 27, 2020 the Company had announced the receipt of an approval of XEGLYZE (abametapir) lotion, 0.74%, a 505(b)(1) NDA by the U.S. Food and Drug Administration (USFDA). Such approval triggered the contractual pre-commercialization milestone of US$20 mn payable to Hatchtech Pty Ltd. which is included in the above mentioned award and has already been accounted for and charged off in the Company's financial statements for the financial year 2020-21.

The Company is exploring all legal options to challenge the award.

Shares of DR.REDDY'S LABORATORIES LTD. was last trading in BSE at Rs.5414.9 as compared to the previous close of Rs. 5459.55. The total number of shares traded during the day was 196755 in over 5144 trades.

The stock hit an intraday high of Rs. 5479.55 and intraday low of 5405.5. The net turnover during the day was Rs. 1074200412.

Source : Equity Bulls

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