Dr. Reddy’s Laboratories (REDY.BO): Semaglutide supplies stopped following API issues; Retain Sell

Research evidence excerpt

Dr. Reddy’s Laboratories (REDY.BO): Semaglutide supplies stopped following API issues; Retain Sell

Equity Research

9 July 2026 | 11:16PM IST

Dr. Reddy’s Laboratories (REDY.BO): Semaglutide supplies stopped

following API issues; Retain Sell

What happened? Shyam Srinivasan, CFA

+91(22)6616-9346 |

Dr. Reddy’s, earlier today, announced that certain batches of Semaglutide were shyam.srinivasan@gs.com

Goldman Sachs India SPL

found to be out of specification due to an issue associated with the active

Karan Vora, CFA

pharmaceutical ingredient (API) used in the product. Per the release, the company +91(22)6616-9146 |

has been investigating the root cause and taking appropriate measures to ensure karan.vora@gs.comGoldman Sachs India SPL

product quality. Until the issue is resolved, commercial supplies of the product will

be delayed for a certain period of time (Sept/ Oct’26). Per the company, there is no

impact on patient safety or on the product’s existing global regulatory filings, and it

remains committed to ensuring reliable global supplies.

What could it mean for the business?

In a conference call on the issue, management mentioned that given the current

issues, the company is in the process of making the necessary adjustments and

tweaking the process of the API, revalidating the same and will send to OneSource

(with which it has a long term agreement) for the manufacturing of the drug product.

Dr. Reddy’s mentioned that it will likely write off some of the inventory in the channel

which will impact its 2Q financials. The company expects to have resolved issues by

Sept/Oct’26 and hence aims to restart supply from Oct-end/Nov’26. It now guides

for between 6-7mn of Semaglutide pen supplies in H2FY27, or a 3-month delay vs.

earlier guidance.