Dr Reddys Laboratories

Dr Reddy's Laboratories shares declined 4% following Health Canada's notice of non-compliance for the company's Abbreviated New Drug Application (ANDA) for Semaglutide, a weight loss drug. Semaglutide is a complex peptide molecule that typically faces higher regulatory approval standards, with other Indian pharmaceutical companies like Cipla, Lupin, and Sun Pharma experiencing multiple review cycles with the US FDA for similar applications. The market reaction appears amplified due to Dr Reddy's significant investment in backend infrastructure for this launch and their plans to be the first launcher in several markets. The company has substantial expectations riding on the Semaglutide launch, making regulatory setbacks particularly impactful for investor sentiment.

Dr. Reddy's Laboratories delivered consolidated revenues of ₹8,805 crores ($992 million) in Q2 FY26, marking 9.8% year-over-year growth despite pressure from lower Lenalidomide sales and product-specific price erosion in US generics. The growth was supported by the acquired consumer healthcare business and double-digit growth across other markets. EBITDA margins stood at 26.7%, while profit after tax grew 14% year-over-year to ₹1,437 crores ($162 million). The company made progress on key pipeline products with the Subject Expert Committee recommending approval for Semaglutide injection in India, and received positive opinion from European Medicines Agency for denosumab biosimilar. The India business reported strong 13% growth to ₹1,578 crores, moving up to 9th position in the Indian Pharmaceutical Market. North America generics declined 16% to $373 million due to Lenalidomide price erosion, while European generics grew 115% to €135 million driven by the acquired Nicotine Replacement Therapy portfolio. The company expects to submit Abatacept BLA by end of December 2025 and anticipates feedback on Semaglutide from Health Canada in coming weeks.

Dr Reddy's Laboratories has received a notice for not complying with Canadian regulations related to semaglutide, a diabetes and weight management medication.