NewsEarningsDr Reddy's subsidiary receives USFDA Complete Response Letter for AVT03 biosimilar applicationDr Reddy's subsidiary receives USFDA Complete Response Letter for AVT03 biosimilar application
Dr Reddy's Swiss subsidiary received a Complete Response Letter from USFDA for AVT03 biosimilar application, with observations related to Alvotech's manufacturing facility inspection. The company reported Q2 FY26 net profit growth of 7.3% to ₹1,347 crore and revenue increase of 9.8% to ₹8,828 crore, though EBITDA margins compressed to 22.8%. H1 FY26 revenues grew 11% to ₹17,350 crore with broad-based growth except in North America Generics.
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Dr Reddy's Laboratories announced that its wholly owned subsidiary, Dr Reddy's Laboratories SA, Switzerland, has received a Complete Response Letter from the United States Food and Drug Administration for its Biologics License Application for AVT03. The development comes as the pharmaceutical major also reported its second quarter financial results showing mixed performance trends.
Regulatory Update on AVT03 Biosimilar
AVT03 represents a proposed biosimilar candidate to Prolia and Xgeva, developed by Alvotech hf. The application was submitted by Dr Reddy's Swiss subsidiary to the USFDA for regulatory approval. According to the company's disclosure, the Complete Response Letter specifically refers to observations arising from a pre-license inspection conducted by the USFDA at Alvotech's manufacturing facility located in Reykjavik.
Second Quarter Financial Performance
Dr Reddy's Laboratories reported financial results for the September quarter (Q2 FY26) showing growth in key revenue metrics alongside margin pressures. The company's performance reflected broad-based growth across most markets, with some challenges in specific segments.
| Financial Metric: | Q2 FY26 | Q2 FY25 | YoY Change |
|---|---|---|---|
| Net Profit: | ₹1,347.00 crore | ₹1,256.00 crore | +7.3% |
| Revenue: | ₹8,828.00 crore | ₹8,038.00 crore | +9.8% |
| EBITDA: | ₹2,010.00 crore | ₹2,076.80 crore | -3.2% |
| EBITDA Margin: | 22.8% | 25.8% | -300 bps |
The net profit of ₹1,347.00 crore came in slightly below the CNBC-TV18 poll estimate of ₹1,403.70 crore, while revenue surpassed expectations of ₹8,595.40 crore. EBITDA performance showed weakness, falling short of the poll estimate of ₹2,208.50 crore.
Half-Year Performance and Market Dynamics
For the first half of FY26, Dr Reddy's reported consolidated revenues of ₹17,350.00 crore, reflecting an 11% year-on-year growth. The company experienced broad-based growth across key markets, with one notable exception being North America Generics, which faced challenges from higher price erosion in select products and lower lenalidomide sales.
The acquired Consumer Healthcare portfolio in Nicotine Replacement Therapy (NRT) contributed positively to the overall performance during the period. This acquisition appears to have provided some offset to the challenges faced in other segments.
Market Response
Shares of Dr Reddy's Laboratories ended trading at ₹1,273.00 on the BSE, declining by ₹7.20 or 0.57% for the session. The stock movement reflected investor reaction to both the regulatory development and the quarterly financial results.
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