Dr. Reddy's shares fall 2% as semaglutide supply delayed on API issue

Dr. Reddy's Laboratories Ltd. delayed commercial supplies of semaglutide after an active ingredient issue, sending shares down 2%.

"Certain batches of semaglutide were found to be out of specification due to an issue associated with the active pharmaceutical ingredient used in the product," Dr. Reddy's said in an exchange filing Thursday.

The Hyderabad-based company said it is investigating the root cause and taking measures to ensure product quality. There was no impact on patient safety or existing global regulatory filings, it said. The company did not specify when supplies would resume.

The delay comes as more than half a dozen Indian drugmakers have launched lower-cost copies of Novo Nordisk's Ozempic and Wegovy, vying for a share of the fast-growing global obesity treatment market. Demand for the drugs has plateaued in June, according to research firm Pharmarack.

Dr. Reddy's launched its own semaglutide injection, Obeda, in India to treat diabetes. Semaglutide is the key ingredient in Novo Nordisk's blockbuster diabetes and obesity medicines.

At 10:15 am on July 9, Dr. Reddy's shares were trading 2% lower at Rs 1,320.6 apiece.

The delay puts Dr. Reddy's at a disadvantage in the race to capture market share in the $100 billion-plus global obesity drug market. Investors will watch for updates on the API investigation and any impact on the company's regulatory filings in key markets including the US and Canada.

This article is for informational purposes only and does not constitute investment advice.