Dr. Reddy's Laboratories Ltd. announced the appointment of Dr. Sridevi Khambhampaty as Global Head of Biologics and Senior Management Personnel, effective July 22, 2026. The Board of Directors approved this appointment pursuant to the recommendation of the Nomination, Governance and Compensation Committee. Additionally, the Board approved the appointment of M/s Deloitte Haskins & Sells LLP as the Independent Registered Public Accounting Firm for auditing financial statements to be included in the Annual Report on Form 20-F and reviewing interim financial statements filed with the U.S. Securities and Exchange Commission.

Management Appointments

Dr. Sridevi Khambhampaty has been inducted as a Member of the Management Council. She is an accomplished biopharmaceutical leader with over two decades of experience spanning Biologics R&D, Quality, and Business leadership. Most recently, she served as the CEO of Shilpa Biologics. Prior to this, she held senior leadership roles at Syngene International and Intas Biopharma. In her previous stint at Dr Reddy's, she led teams in Product Development and Quality Control at Biologics. She holds a PhD in Biological Sciences from NCBS (TIFR) and completed her postdoctoral research at Stanford University School of Medicine.

Auditor Appointment

The appointment of M/s Deloitte Haskins & Sells LLP as the Independent Registered Public Accounting Firm aligns with its earlier appointment as Statutory Auditors for a term of five consecutive years, commencing from the conclusion of the 42nd AGM till the conclusion of the 47th AGM, subject to shareholder approval. The firm, registered with the Institute of Chartered Accountants of India (Registration No. 117366W/W-100018), will audit financial statements for the Annual Report on Form 20-F and review interim financial statements filed with the U.S. Securities and Exchange Commission on Form 6-K.

Dr Reddy's Laboratories has halted commercial supplies of semaglutide after identifying an impurity issue during the scale-up validation of its active pharmaceutical ingredient (API). The company aims to resume supplies by late October or early November, targeting the delivery of 6 to 7 million pens between Q3 and Q4 of FY27. This development follows a disclosure made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailing a quality deviation found in the formulation process at its API facility.

Management clarified that the impurity, a degradation detected during the testing of the finished drug product, is linked to the process and reaction of the API scale-up. Consequently, the company must repeat validation with three new batches, a process expected to conclude by the end of September. This timeline assumes successful validation and testing, which includes sterility checks taking up to three weeks. While the API itself met specifications initially, the degradation occurred during formulation, necessitating a halt in production to ensure compliance with cGMP standards.

Impact on Operations and Guidance

The supply disruption will result in a temporary halt of commercial quantities for several months. The company confirmed that there is no recall of product already in the market, as the affected batches were validation lots that were not shipped commercially. However, inventory lying with partner OneSource may require a write-down. Management noted that this event will result in a downside to the sales volumes previously discussed in May and June, though the long-term EBITDA margin target of 20% plus remains unchanged.

Strategic and Financial Implications

The company emphasized that the issue is isolated to the new scale-up process and does not affect existing global regulatory filings or the supply of semaglutide oral tablets, which use a different API source. Dr Reddy's is currently in a silent period for its Q1FY27 results and will provide further financial details in two weeks. The management remains committed to its long-term partnership with OneSource for fill-finish operations, despite the current delay. Additionally, the company is qualifying an alternate supplier as a backup, though this option is approximately a year away due to the requirement for a pre-approval supplement.