Dr Reddys Laboratories , a leading pharmaceutical company, reported a robust performance in the second quarter, with consolidated revenues reaching ₹8,805 crores ($992 million), marking a 9.8% year-over-year growth. This growth came despite headwinds from lower Lenalidomide sales and product-specific price erosion in the US generics market.

Key Financial Highlights

Segment Performance

North America Generics

• Revenue: $373 million, down 16% YoY
• Impacted by price erosion in select key products, primarily Lenalidomide
• Launched seven new products during the quarter

European Generics

• Revenue: €135 million, up 115% YoY
• Growth driven by acquired Nicotine Replacement Therapy (NRT) portfolio and new product launches
• Launched eight new generic products across European markets

India Business

• Revenue: ₹1,578 crores, up 13% YoY
• Moved up to 9th position in the Indian Pharmaceutical Market
• Growth supported by new product launches, improved pricing, and higher volumes

Emerging Markets

• Revenue: ₹1,655 crores, up 14% YoY
• Growth primarily driven by new product launches across markets
• Russia business grew 13% YoY in constant currency terms

Pharmaceutical Services and Active Ingredients (PSAI)

• Revenue: $108 million, up 8% YoY
• Filed 37 Drug Master Files globally

Strategic Developments

• Acquired Stugeron® and related brands from Janssen Pharmaceutica, strengthening presence in the anti-vertigo segment across 18 markets in APAC and EMEA
• Launched two novel drugs in India: Tegoprazan (brand name 'PCAB®') and Linaclotide (brand name 'Colozo®') in the gastro-intestinal portfolio
• Partnered with Unitaid, Clinton Health Access Initiative, and Wits RHI to make Lenacapavir, a long-acting HIV prevention tool, accessible in low-and middle-income countries
• Subject Expert Committee recommended approval for Semaglutide injection in India
• Received positive opinion from European Medicines Agency for denosumab biosimilar candidate
• USFDA accepted Investigational New Drug application for COYA 302, a novel drug for ALS treatment

Regulatory Updates

• USFDA conducted Pre-Approval Inspection at Bachupally biologics facility, issuing Form 483 with five observations
• Received Complete Response Letter for Rituximab biosimilar candidate
• USFDA GMP inspection at Mirfield API facility in the UK resulted in Form 483 with seven observations
• API sites CTO-5 in Miryalaguda and Middleburgh facility classified as VAI following USFDA inspections

Outlook

Dr. Reddy's continues to focus on growing its base business, scaling presence in Consumer Healthcare, Innovative therapies, and Biosimilars. The company is advancing key pipeline programs, including Semaglutide and Abatacept, while driving cost efficiencies and pursuing strategic collaborations to support sustainable growth.

Erez Israeli, CEO of Dr. Reddy's, commented, "We delivered a steady performance in Q2, achieving near double-digit growth, despite lower Lenalidomide sales. We are addressing the impact through levers such as growing our base business, containing costs, and focusing on key products. We remain committed to our growth and margin targets, with the trajectory dependent on the success of strategic initiatives like Semaglutide, Abatacept, and business development activities."

The company maintains its focus on innovation-led portfolio expansion, operational efficiency, and strategic partnerships to drive long-term value for stakeholders.

Dr Reddys Laboratories , a prominent Indian pharmaceutical company, has encountered a regulatory setback in its efforts to introduce semaglutide, a diabetes and weight management medication, to the Canadian market. The company recently disclosed that it has received a Notice of Non-Compliance (NON) from the Pharmaceutical Drugs Directorate of Canada regarding its Abbreviated New Drug Submission (ANDS) for Semaglutide Injection.

Regulatory Challenge

The Notice of Non-Compliance outlines requests for additional information and clarifications on specific aspects of Dr Reddy's submission. This development highlights the stringent regulatory environment in the pharmaceutical industry, particularly for complex medications like semaglutide, which has gained significant attention for its effectiveness in diabetes management and weight loss.

Company's Response

Dr Reddy's has stated its commitment to addressing the regulatory concerns promptly. The company plans to submit a response within the stipulated time period, demonstrating its dedication to compliance and product quality. In an official statement, Dr Reddy's expressed confidence in the quality, safety, and comparability of their proposed semaglutide product.

Implications and Outlook

This regulatory hurdle could potentially delay Dr Reddy's entry into the Canadian market with its semaglutide product. However, the company remains optimistic about making this therapy available to patients in Canada and other markets at the earliest opportunity.

Market Context

Semaglutide, originally developed by Novo Nordisk, has been a significant advancement in the treatment of type 2 diabetes and obesity. The introduction of generic versions by companies like Dr Reddy's is anticipated to increase accessibility and potentially reduce costs for patients.

While this regulatory notice presents a challenge, it is a common part of the drug approval process, especially for complex biologics. Dr Reddy's response to this notice and the subsequent regulatory decisions will be crucial in determining the timeline for the potential launch of their semaglutide product in Canada.

Investors and stakeholders will be closely monitoring how Dr Reddy's addresses these regulatory requirements, as it could impact the company's expansion plans in the North American market and its position in the competitive landscape of diabetes and weight management medications.