Dr. Reddy's Shares Plunge 7% on Semaglutide Supply Delay Over Quality Issue
Dr. Reddy's Shares Plunge 7% on Semaglutide Supply Delay Over Quality Issue
Dr. Reddy's Laboratories saw its shares drop sharply after delaying commercial supplies of its semaglutide product due to a critical API quality issue. Learn more about the investigation and market impact.
Shares of Dr. Reddy's Laboratories experienced a significant downturn on Thursday, falling by as much as 6.5% on the BSE. The sharp decline came after the pharmaceutical giant announced a delay in the commercial supplies of its crucial semaglutide product, citing a quality-related issue concerning the active pharmaceutical ingredient (API) used in specific batches.
The company disclosed that certain batches of semaglutide were found to be 'out of specification' due to a problem associated with the API. An immediate investigation has been launched to pinpoint the root cause of the issue, with Dr. Reddy's assuring stakeholders that appropriate measures are being taken to uphold product quality. Commercial supplies of the drug will remain on hold until the matter is fully resolved.
Despite the supply delay, Dr. Reddy's clarified that this development has no bearing on patient safety, nor does it impact the product's existing global regulatory filings. The company reiterated its firm commitment to ensuring reliable global supplies of this vital metabolic therapy, often used in the treatment of type-2 diabetes and weight management.
This disclosure follows less than two months after Dr. Reddy's made a notable entry into the Indian market with its oral semaglutide tablet, branded as Obeda. Launched in 3 mg, 7 mg, and 14 mg strengths, the once-daily oral drug was positioned as a significant milestone in the company's strategy to build its GLP-1 portfolio. Earlier this year, Dr. Reddy's also became one of the first companies in India to launch a generic once-weekly injectable semaglutide following the expiry of a key patent.
The market's reaction to the semaglutide supply delay adds to recent financial pressures on the company. Dr. Reddy's had previously reported an 86% year-on-year decline in consolidated net profit for the January-March quarter of FY26, bringing the figure down to Rs 221 crore from Rs 1,587 crore in the same period last year. This earlier financial performance had already led to target price cuts by several brokerages.
