Hiccup in semaglutide scale-up Quick Note

Research evidence excerpt

Hiccup in semaglutide scale-up Quick Note

Global Markets Research

Dr Reddy's Laboratories REDY.NS DRRD IN 10 July 2026

EQUITY: HEALTH CARE & PHARMACEUTICALS

RatingHiccup in semaglutide scale-up Remains Buy

Target price INR 1,740 RemainsQuick Note

Closing price INR 1,270 9 July 2026Halt in semaglutide injectable supplies

On 9 July, Dr Reddy’s announced that certain batches of semaglutide did not meet

specifications owing to the presence of impurities. The problem arose during a scale-up of

production, and the issue was identified with the active ingredient. Product supplies will be Research Analysts

stalled until this issue is resolved. This impacts supply of injectable semaglutide in India, India Pharmaceuticals

Canada, and other emerging markets. The oral formulation launched in India is not Saion Mukherjee - NFASL

affected, as the API for oral formulation is sourced separately and not dependent on in- saion.mukherjee@nomura.com

house production. +91 22 403 74184

The next steps Kushal Chovatia - NFASL

kushal.chovatia@nomura.comDr Reddy’s will decide on the changes in the manufacturing process and parameters,

+91 22 403 74013

which could potentially address this issue over the next few days. The company will

undertake validation batches to establish consistency of the manufacturing process. The

process is likely to be completed by end-September 2026. If successful, commercial

production and supplies will then commence by November, according to management.

However, should the changes fail to address the quality issue, there will be further

indefinite delay.

Dr Reddy’s may pursue an alternate API (active pharmaceutical ingredient) source.

However, we estimate the process of a source change would take about one year.

Potential impact