Dr Reddy’s delays semaglutide supplies due to API issue

MUMBAI: Dr. Reddy’s Laboratories’ plans to tap the early generic semaglutide market suffered a setback as manufacturing problems delayed supplies of the blockbuster diabetes and weight-loss drug, forcing the company to cut its expected volumes for this year.

The drugmaker said in its exchange filing on Thursday that supplies of generic semaglutide will be delayed and shipments are expected to continue until November after some batches were found to be out of specification.

The problem arises from the active pharmaceutical ingredient (API) used in the product. The company said commercial supplies will remain on hold until the issue is resolved, adding that there is no impact on patient safety or existing global regulatory filings.

This announcement shook investors and the shares of the Hyderabad-based company closed 5.77% lower after falling more than 6% during the day. ₹1,271.20 per person on the National Stock Exchange.

Speaking on an investor call later Thursday, company management said supplies will likely continue through November. It also reduced its expected supply for the current fiscal year to 6-7 million items from the earlier estimate of 12 million items. The company said existing inventory in India and Canada, where the drugmaker received approval in May, was not affected.

While the company’s leadership maintained its FY27 financial outlook, analysts said a prolonged disruption could erode the company’s competitive advantage in the generic semaglutide market. Dr. Reddy’s was among the first companies in Canada to launch a generic version of its diabetes and weight loss drug.

The company said it detected an impurity during API testing in preliminary validation batches as it ramped up production.

Beyond selling its own brand, Dr Reddy’s also produces semaglutide for other drug manufacturers.

Ahmedabad-based Torrent Pharma said on Thursday that it has recalled selected batches of Semalix injection (2 mg and 4 mg) manufactured by Dr Reddy’s as a “precautionary measure”. Other dosages of oral semaglutide tablets as well as injections were not affected, he noted.

Dr Reddy’s manufacturing partner, contract manufacturer OneSource Specialty Pharma, said in a separate exchange filing that the development would not have a significant impact on its operations.

“While we remain committed to our long-standing valued partnership with DRL, we have sufficient demand for the product from our other customers, including Canada, and our capabilities are fully committed,” he said.