Indian drugmaker plans November semaglutide relaunch after API impurity halt

HYDERABAD, Oct 25. Dr Reddy's Laboratories is counting on a semaglutide relaunch, most likely in November, to start its next phase of growth, Chief Financial Officer M.V. Narasimham told Moneycontrol after September quarter results. Commercial supply stopped in July after an impurity turned up in scale up batches of the drug's active ingredient. The company says 6 to 7 million pens could be supplied between November and March, about half of the 12 million pen first year goal it had set before. The plan depends on new validation batches passing quality tests.

What the CFO said after the September quarter

Narasimham told Moneycontrol that new launches, a better product mix and tighter cost control lifted the EBITDA margin back above 20 percent. "The combination of cost productivity and driving sales with a better product mix has now brought us back to a 20 percent-plus EBITDA level," he said. Moneycontrol described semaglutide as the biggest near term trigger. The CFO said the company is confident it can meet demand and expects the drug to become a meaningful contributor over the next several years. That is a company forecast, not a result. The interview with Moneycontrol also named biosimilars, the India business and Aurigene, the group's contract research and manufacturing unit, as drivers after a period hit by falling lenalidomide sales and manufacturing setbacks.

The quarter itself was weaker. Dr Reddy's Q2 results, released on Oct 23, showed profit down 36 percent from a year earlier at Rs 925 crore and consolidated revenue down 1.5 percent at Rs 8,671 crore, according to results coverage syndicated on TradingView. The company blamed lower North American sales of lenalidomide, the generic form of the blood cancer drug Revlimid. EBITDA was Rs 1,783 crore, a margin of 20.6 percent. India revenue rose 17 percent to Rs 1,851 crore, about a fifth of the total. Branded drugmakers report a different pattern for now, with Lilly's third quarter volume growing faster than its prices fell. The two companies sell different kinds of products, so that comparison is only a backdrop.

Why the semaglutide API impurity stalled supply

On a July 9 call, Chief Executive Erez Israeli said an impurity was found out of specification during validation testing of scale up batches of the semaglutide active pharmaceutical ingredient, or API. The company paused commercial supply. Management said the affected batches never reached the market, so no recall was needed, and that product already supplied raised no patient safety concern. Israeli said the problem did not affect existing or pending regulatory filings or the oral tablet version. Narasimham said semaglutide stock held at OneSource Specialty Pharma, the contract maker of its pens, was still company inventory and had not been sold. The call transcript filed with the SEC records these statements in the company's own words.

Management said the affected batches never reached the market, so no recall was needed, and that product already supplied raised no patient safety concern.

The company said it would find the root cause, adjust the process and repeat validation. On the July call it lowered its expectations to 6 to 7 million pens supplied between the third and fourth quarters of fiscal 2027, a window Israeli described as November through March. An analyst on the call cited 12 million pens as the earlier first year target. On Oct 23, Narasimham said formulation batches were under way. "Based on the current progress we will relaunch this molecule most likely in November," he said. No outside party has publicly confirmed the fix. The material reviewed for this story does not name the impurity or give test results, so its nature and the size of the process change remain unclear.

Generic semaglutide in Canada and pen targets

Moneycontrol framed the coming growth cycle around a semaglutide relaunch in Canada. Dr Reddy's sells generic medicines, so its product would compete with branded semaglutide only in markets where patents and regulators allow. On Sept 28, Narasimham told Informist that the company would return to the market in the October to December quarter and that the December timeline also covered Canada. He said Dr Reddy's expected to sell 6 million pens in fiscal 2027 and 12 million in fiscal 2028. Once new API is ready, he said, OneSource would start producing pen batches. Those figures are company targets. They depend on validation results, on partner production and on regulators, and the company has not given a market by market breakdown.

For patients, more suppliers of an approved molecule can widen access, but only through licensed products dispensed on prescription. A generic semaglutide reviewed by a regulator is not the same as unapproved vials sold online, which carry counterfeit, dosing and contamination risks that no agency has checked. In the United States, the end of the branded semaglutide shortage in 2025 closed the window for pharmacies making compounded copies of semaglutide, a separate route from the generic filings described here. Dr Reddy's semaglutide plans also arrive as Novo Nordisk and Eli Lilly push new weekly and oral drugs. Whether generic semaglutide in Canada lowers what patients pay will depend on pricing that the company has not disclosed in the reviewed material.

Abatacept biosimilar and what remains unknown

Moneycontrol's headline names abatacept as the second pillar of the growth plan. Abatacept is an immune medicine used in rheumatoid arthritis. It is a large fusion protein rather than a peptide, so it sits at the edge of this desk's beat, and it appears here because the CFO tied it to the same growth phase. The text of the interview available to us gives no launch date, target market or regulatory status for an abatacept biosimilar. In September, Narasimham told Informist that the company plans to launch at least one new biosimilar a year from now on, with a pembrolizumab biosimilar targeted for fiscal 2029. Readers should treat these timelines as plans that can slip, as the semaglutide schedule already has.

Several points remain open. The company has not said which regulators must sign off on the changed manufacturing process before the semaglutide relaunch, or whether any already have. It has not put a revenue figure on the drug in the coverage reviewed for this story. Pen numbers measure supply to a partner, not sales to patients. The next checks are simple to track. The first is whether commercial supply resumes in November, as Narasimham said. The second is what Dr Reddy's reports for the October to December quarter, when the first relaunch volumes would show up. Further updates will appear on our industry desk as the company files them. Until then, the targets remain the company's own.

Conclusion

Dr Reddy's has tied its next growth phase to a semaglutide relaunch that it says will most likely begin in November, after a semaglutide API impurity halted supply in July. The company now targets 6 to 7 million pens through March, about half its earlier goal, and says shipped product was not affected. Those are company statements. Validation results, regulator steps and actual sales will show whether the plan holds.