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Dr. Reddy's Stock Slides Nearly 6% on Semaglutide Supply Delay
Shares of Dr. Reddy’s Laboratories (NYSE:RDY) tumbled on Thursday following the company's announcement of a delay in the commercial supply of its semaglutide drug. The stock dropped 5.9% to ₹1,269.6, sharply underperforming the broader market.
Production Issues Cited
Dr. Reddy's attributed the supply chain disruption to an unspecified issue with the active pharmaceutical ingredient (API) used to produce the medication. Semaglutide is a highly sought-after drug used for treating diabetes and for weight management.
The company had previously launched its version of the semaglutide injection in India under the brand name Obeda. Delays in bringing high-demand drugs to market can impact a company's revenue projections and competitive positioning.
AdMarket Impact and Outlook
Investor reaction to the news was swift, sending the company's shares lower while India's benchmark Nifty 50 index gained 0.7%, according to Investing.com. The sell-off also occurred just before the stock's ex-dividend date of July 10 for a recently announced ₹8 dividend.
The setback highlights the manufacturing complexities involved in producing blockbuster drugs like semaglutide. Investors will be watching for further updates from the company on the resolution of the API issue and a revised timeline for commercial distribution.