The DRL counter saw volumes spurt to 1,60,000 on Tuesday, even as the scrip touched an intra-day high of Rs 1,153 on the BSE, before closing the day at Rs 1,025. Tuesday's close was, however, lower than that of the previous day at Rs 1,068.

Significantly, industry analysts say that they expect considerable activity in the company in the next two quarters. Indications are that the Hyderabad-based company is expected to receive additional milestone payments by September for both its anti-diabetes molecules licensed to Danish giant Novo Nordisk.

Novo Nordisk had successfully concluded phase one of clinical studies in healthy volunteers of NN2344, without safetyconcerns and preparations are on for initiation of phase two trials in the case of DRF 2593, an insulin sensitiser molecule. DRF 2725 (a blood glucose and dyslipidemia regulating compound), which was licensed last year, is expected to enter phase one trials in the third quarter of 1999.

Sources say that the company is also working on a strategic alliance in China. Dr Reddy's Labs is believed to be in talks with Rotan of Canada, though the company's official spokesperson, in response to a query, only said, "We have not finalised the joint venture in China".

On Dr Reddy's Research Foundation's anti-cancer lead compound, DRF-1042, an ICMR committee was to examine the company's Investigational New Drug Application (INDA), prior to granting approval for clinical trials in India. DRF-1042, based on in-vitro studies, is active in renal, breast and colon cancer.

Dr SH Advani, chief oncologist, Tata Memorial Hospital, has been appointed as the principal investigator for the proposed trial. Phase one trialscould involve as many as 50 patients and would be undertaken at two key centres, including the Tata Memorial hospital.