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Dr. Reddy's Shares Fall After Semaglutide Supply Delayed by API Issue
Shares of Dr. Reddy’s Laboratories (NSE:REDY) fell as much as 6.5% on Thursday after the Indian pharmaceutical company disclosed a delay in the commercial supply of its semaglutide product due to a quality issue with its active ingredient.
Manufacturing Setback
In an exchange filing, Dr. Reddy's stated that certain batches of semaglutide were found to be "out of specification" because of an issue related to the active pharmaceutical ingredient (API). The company reported it is investigating the root cause and implementing corrective measures to ensure product quality.
Dr. Reddy's did not provide a specific timeline for when the issue would be resolved, stating that commercial supplies will be postponed until the matter is addressed. The company has scheduled a conference call for later on Thursday to discuss the issue with investors and analysts.
Market Reaction
AdThe announcement triggered a significant sell-off in the company's stock, with shares on the National Stock Exchange of India dropping to 1,261.10 rupees in morning trading. The delay represents a potential setback for Dr. Reddy's plans to enter the highly lucrative market for GLP-1 agonists like semaglutide, which are used in popular diabetes and weight-loss drugs.
Despite the manufacturing problem, Dr. Reddy's provided assurances on several key points. The company stated that the issue:
- Has no impact on patient safety.
- Does not affect the product's existing global regulatory filings.