Dr. Reddy's Laboratories Ltd. announced on August 1, 2026, that the U.S. Food and Drug Administration (FDA) has approved its rituximab biosimilar for the U.S. market. This regulatory milestone strengthens the company’s global biosimilars portfolio and expands its presence in the United States, one of the world’s largest pharmaceutical markets. Fresenius Kabi will exclusively commercialize the product in the U.S. under a pre-existing agreement.

The disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The FDA approval was granted on the agency’s goal date, following a successful Pre-License Inspection (PLI) at Dr. Reddy's biologics manufacturing facility in Bachupally, Hyderabad. Sridevi Khambhampaty, Global Head of Biologics at Dr. Reddy's Laboratories, stated that the approval reflects the company’s capabilities in developing and manufacturing complex biologic medicines for global markets.

Rituximab is a monoclonal antibody targeting the CD20 antigen on B lymphocytes. It is widely used to treat B-cell malignancies, including non-Hodgkin lymphoma and chronic lymphocytic leukemia, as well as autoimmune conditions such as rheumatoid arthritis, granulomatosis with polyangiitis (GPA), and microscopic polyangiitis (MPA). The FDA’s decision was supported by comprehensive analytical, non-clinical, and clinical evidence demonstrating that the biosimilar is highly similar to the reference product, Rituxan®, with no clinically meaningful differences in safety, purity, or potency.

Global Commercial Footprint

The rituximab biosimilar is already established in multiple international markets. Dr. Reddy's has commercialized the product in India, the European Union, the United Kingdom, Switzerland, and Canada. Additionally, it holds marketing approvals in more than 25 emerging markets. This broad footprint underscores the company’s strategy to leverage its biosimilars business for both near-term and long-term growth across developed and emerging economies.

What the Numbers Show

The approval of the rituximab biosimilar in the U.S. represents a significant diversification of Dr. Reddy's revenue streams within the high-margin biosimilars segment. With the product already generating sales in over 30 countries, the U.S. entry—facilitated by Fresenius Kabi’s distribution network—positions the company to capture value from one of the most lucrative oncology and immunology markets globally. This move complements Dr. Reddy's existing portfolio of six commercial biosimilar products in India and supports its broader goal of ramping up manufacturing capacity for global expansion.

Dr Reddy's Laboratories reported a year-on-year revenue decline of 5.6% to ₹8,071 crore (US$853 million) for Q1FY27, missing analyst estimates of ₹88.05 billion. The shortfall was driven by a ₹240 crore provision for semaglutide API-related costs and lower lenalidomide sales in North America. Despite the top-line miss, the underlying base business delivered double-digit growth across key geographies, with an adjusted EBITDA margin of 15.4% compared to the reported 12.5%. The company maintained a net cash surplus of ₹3,057 crore as of June 30, 2026.

The Board of Directors approved the unaudited standalone and consolidated financial results at their meeting held on July 22, 2026. The results were filed with stock exchanges pursuant to Regulation 47 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Chief Executive Officer Erez Israeli stated that the company plans to resume semaglutide commercial supplies by November 2026, following the resolution of API quality issues.

Financial Performance

Consolidated gross profit margin declined by 1,039 basis points year-on-year to 46.5%, impacted by lower lenalidomide sales, the semaglutide API provision, and higher solvent costs due to the Middle East conflict. Excluding the semaglutide API provision, the overall gross margin was 49.4%. Selling, general, and administrative (SG&A) expenses rose 12% year-on-year to ₹2,882 crore, primarily due to personnel increments, adverse forex movements, and elevated freight costs. Research and development spend decreased 8% year-on-year to ₹577 crore, reflecting lower biosimilars development expenditure.

Profit after tax attributable to equity holders stood at ₹443 crore (US$47 million), representing a margin of 5.5%. Diluted earnings per share (EPS) was ₹5.32. The effective tax rate for the quarter was 21.3%, lower than the 26% in the corresponding period last year, due to the reversal of previously recognized tax provisions.

Business Highlights

Dr Reddy's achieved several strategic milestones, including the first-to-market launch of bosutinib 400mg in the US with 180-day exclusivity. The company became the first to launch generic semaglutide injection for Type 2 Diabetes in Canada and introduced oral semaglutide in India. Emerging Markets revenue grew 31% year-on-year to ₹1,833 crore, while India revenue rose 17% to ₹1,718 crore. North America generics revenue declined 41% year-on-year to US$236 million, largely due to lenalidomide.

On the regulatory front, the USFDA issued a Form 483 with seven observations following a Pre-Approval Inspection at the Bachupally biologics facility in June 2026. Management confirmed that responses were submitted within the stipulated timeline and expressed confidence in receiving approval for abatacept by December 2026.

What the Numbers Show

The divergence between reported EBITDA margins (12.5%) and adjusted margins (15.4%) highlights significant drag from one-time charges rather than operational inefficiency. While North America revenue decreased sharply, Emerging Markets and India demonstrated robust growth, indicating a successful geographic diversification strategy. The company’s guidance for full-year capex of approximately ₹1,800 crore suggests continued investment in biosimilars and peptides, despite current profitability pressures from these segments.