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Informist, Wednesday, Jul. 30, 2025

 

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--Dr Reddy's CFO: Gearing up to tap first wave of semaglutide sales in Canada
--CONTEXT: Semaglutide is Glucogon-Like-Peptide-1 drug for diabetes, obesity
--Dr Reddy's CFO: Expect Canada approval for semaglutide by Dec, launch Jan
--CONTEXT: Dr Reddy's CFO MV Narasimham's comments in an interview
--Dr Reddy's CFO: Aim to launch semaglutide drug in Brazil by May
--Dr Reddy's CFO: May launch semaglutide drug in India around March 
--Dr Reddy's CFO: To launch semaglutide drug in total 87 countries in phases 
--CONTEXT: Semaglutide drug to go off-patent on Jan 4 in Canada
--Dr Reddy's: Confident of double-digit sales growth, 25?ITDA margin FY26
--Dr Reddy's CFO: Consumer health, branded generics to drive growth in FY26
--Dr Reddy's CFO: India, Europe, emerging markets to drive FY26 growth
--Dr Reddy's CFO: FY26 US sales may see flat to mid-single digit growth
--Dr Reddy's CFO: New product launches, volume growth to aid US sales FY26
--Dr Reddy's CFO: Focus on market share gains for existing products in US
--Dr Reddy's CFO: Revlimid remains a contributor to base business in US
--Dr Reddy's CFO: Will restart bidding for China govt tenders from Feb
--Dr Reddy's:Seeking approval for at least 10 pdts/yr in China; R&D underway
--Dr Reddy's CFO: May see meaningful growth numbers from China in FY27
--Dr Reddy's CFO: Open to acquiring suitable cos, brands across markets
--Dr Reddy's CFO: Have decent cash flows to fund co's inorganic plans
--CONTEXT: Dr Reddy's had cash reserves of INR 29.22 bln as on Jun 30
--Dr Reddy's: First priority is to acquire brands in India, emerging markets 
--Dr Reddy's CFO: India assets valuation multiples are very high now
--Dr Reddy's: Focused on in-licensing deals for India, emerging markets
--Dr Reddy's CFO: Looking for buyout opportunities in US, Europe
--Dr Reddy's CFO: To launch nicotine pdts across markets by Dec
--Dr Reddy's: See 100% sales integration of acquired nicotine brands by Mar
--Dr Reddy's: Nicotine pdt sales global potential 235-240 mln pounds/year
--Dr Reddy's CFO: To file ANDA for abatacept biosimilar in Dec 2026
--CONTEXT: Biosimilar abatacept is used to treat rheumatoid arthritis
--Dr Reddy's CFO: Aim to launch abatacept in US by Jan 2027
--Dr Reddy's CFO: Working on new biosimilar products for India

 

By Narayana Krishna

 

HYDERABAD - Dr. Reddy's Laboratories Ltd. is gearing up to seize the opportunity for its generic version of obesity and diabetes drug semaglutide, expected to get clearance for launch in Canada in January. Semaglutide, currently sold under the Ozempic brand by innovator Novo Nordisk, has annual sales of $1.6 billion in Canada. The drug, which falls under the Glucagon-Like-Peptide-1 or GLP-1 category, will go off-patent on Jan. 4 in Canada.

 

"Going by the current filing, ours will be the first generic launch in Canada," M.V. Narasimham, chief financial officer of Dr. Reddy's Laboratories, told Informist in an interview. When asked what differentiates Dr. Reddy's from several companies that are also planning to enter the market eventually, Narasimham said factors like early filing, regulatory readiness, product innovation, and manufacturing capacity will give the company a first-mover advantage.

 

Companies that are ready with their innovative product and regulatory clearances can grab the opportunity, as the drug is expected to mint big money in the initial phase with limited competition, Narasimham said. Projecting semaglutide as its next big growth driver from 2026-27 (Apr–Mar), the CFO is pinning significant revenue expectations on the drug's early launch. Besides Canada, Dr. Reddy's also plans to launch semaglutide across other countries in a phased manner, he said.

 

Reiterating Dr. Reddy's aim to achieve double-digit revenue growth and 25% margins for FY26 (Apr-Mar), Narasimham said growth will be led by the consumer healthcare business in India, along with overall expansion in Europe and in emerging markets. Dr. Reddy's expects North America, particularly the US, to post flat or mid-single-digit growth in FY26. This would be on the back of new product launches and moderate price erosion in the base business.  

 

GLP-1 PLAY

Dr. Reddy's plans to launch a total of 26 products under the GLP-1 category over the next 10 years, with semaglutide and liraglutide expected to be the first set of products to hit the markets across regions, except in the US.

 

"With the Canadian market for semaglutide estimated at $1.6 billion and only four generic companies having filed so far, Dr. Reddy's believes it can capture a meaningful share. If launched alone, Dr. Reddy's could price the drug at a 25% discount (mandatory as per Canadian norms) to the innovator and still generate substantial revenues, with potential sales reaching $300 million to $400 million depending on pricing and uptake," Narasimham said.

 

Even if the price reduces to half of the current pricing in Canada, the company is confident of achieving $300 million in revenue in the initial phase. The impact of this opportunity will likely reflect only in FY27 sales numbers. Dr. Reddy's accounts sales in Canada as part of its consolidated North America sales.

 

Dr. Reddy's was the first generic company to file an application for approval for the semaglutide generic with Canadian regulator Health Canada. Sandoz, Apotex, and one other company also submitted their applications later. As per Canadian regulatory approval timelines, new competitors may take six to 12 months or even more to get their product approved and enter the market. The company did not specify when did it file for the Canadian approval.

 

Narasimham said Dr. Reddy's is also preparing to launch the drug in Brazil by May, in India around March and in Turkey later while pursuing approvals in 87 global markets in phases. He said competition for GLP-1 products in India is expected to be intense, as several companies are lining up with their respective versions of the drug.

 

Dr. Reddy's has invested in both active pharmaceutical ingredients and fill-finish capacity, targeting production of up to 12 million pens annually by FY27 to meet global demand for the drug, he said. The company is also in a contract manufacturing pact with Bengaluru-based Stelis Biopharma Ltd. to manufacture the drug during initial phases.

 

"We have been working on this product for more than a decade — both on the API and formulation. While we have already tied up with Stelis for the initial launch, we are moving this product to our FTO-11 facility near Visakhapatnam," he said.

 

"We are talking about 10 million to 12 million volumes. We have to see how the market evolves. It depends on how many players are joining. It is an interesting one to watch."  

 

GROWTH DRIVERS

The CFO said consumer healthcare in India and Europe, overall sales in emerging markets, and volume and market share gains in the US are expected to drive the company's sales growth in FY26. The company has projected double-digit revenue growth in FY26, with its earnings before interest, tax, depreciation, and amortisation margins seen at 25%.

 

For FY25, Dr. Reddy's consolidated net profit increased by a little over 1% to INR 57 billion, while consolidated sales rose around 17% on year to over INR 325 billion. For the June quarter, the company reported an 11% on-year rise in revenues to INR 85.72 billion and a 2% on-year increase in net profit at INR 14.18 billion.

 

"If you look at Q1 (Apr–Jun), revenue growth was 11%. Consumer health, NRT (nicotine replacement therapy) business, and all put together — we are saying double-digit growth for the full year, and then our EBITDA margin is likely at 25% or above. We have been guiding...we have been consistent in this message," Narasimham said.

 

The active pharmaceutical ingredients business and contract manufacturing services are also expected to achieve double-digit growth in the current financial year, he said. Narasimham said Dr. Reddy's is relying on its base generics business and consistent new product launches to deliver flat to mid-single-digit growth in the US in the current fiscal. The company plans to launch over 20 products annually, as it has been doing every year in the US, and is focused on growing market share through volume expansion.
 

The CFO said price erosion in the base business has largely stabilised. The US launch of semaglutide is only possible after 2032, post patent expiry in that country. He said the generic cancer drug Revlimid will continue to contribute to overall revenues in the US, though volumes may decline after January. Revlimid has contributed to Dr. Reddy's US sales and overall profitability for over 14 quarters, but its sales are now fading due to price erosion and intense competition.

 

In India and emerging markets, branded formulations and in-licensing are the growth drivers, the CFO said. The company's India sales have consistently outperformed the country's pharmaceutical market growth by over 100 basis points and remains a key focus area going forward, he said.

 

In Europe, the company is seeing strong growth in its base generics business, which expanded 15% in the June quarter, supported by new launches and tender wins.

 

In China, Dr. Reddy's expects to restart participation in government tenders from February and expects meaningful growth from FY27, as its existing pipeline of filings converts into commercial products.

 

Dr. Reddy's is currently facing restrictions on participating in Chinese government procurement tenders due to a product-related challenge with the regulator. The company can only participate in tenders in the country after February, Narasimham said. Despite the regulatory challenges, the company has not slowed down its research & development activity targeting that market, he said. A company delegation is expected to visit China soon for talks, he added.

 

He said the company is filing application for more than 10 products every year with the Chinese regulator and is obtaining approvals. Dr. Reddy's operates its China business through a subsidiary.  

 

EYE ON BUYOUTS

Sitting on INR 29.22-billion cash pile as of Jun. 30, Dr. Reddy's is actively considering various inorganic growth opportunities, the CFO said. The company is exploring the right bets, with no limit on size or region, he said. It is looking for suitable companies, brands, and in-licensing deals across geographies. Besides cash reserves, the company has strong cash flows and is ready to fund deals of any size, he said.

 

For India and emerging markets, Dr. Reddy's first priority would be buying brands and signing licensing agreements. He noted that asset valuations in India are currently very high. The company is also evaluating acquisition opportunities in the US and Europe, he said.

 

Dr. Reddy's is also betting big on its acquired nicotine replacement therapy or NRT portfolio. The company acquired it from Switzerland-based Haleon Group for 458 million sterling pounds (nearly INR 53 billion). Dr. Reddy's now holds the rights to sell this product portfolio in 30 countries, except the US.

 

Narasimham said the integration of the NRT portfolio into Dr. Reddy's sales channels is in progress and the full potential of this category is expected to reflect in sales in FY27. For Apr-Jun, the NRT portfolio contributed INR 6.69 billion to consolidated sales and accounted for nearly 52% of Europe sales, according to the company's June quarter earnings filing. Narasimham said full integration of the NRT business is expected to be completed by the end of FY26.

 

"Since taking over NRT sales in the UK in May and Nordic markets from July, the company is on track to bring 80% of this portfolio into its systems by December 2025, with complete control (on sales channels) by March 2026," he said.

 

Narasimham said the NRT portfolio is expected to generate 235 million sterling pounds to 240 million sterling pounds annually, with an EBITDA margin of 25%. In addition to Europe, Dr. Reddy's is expanding NRT business to Australia, Canada, Brazil, and key Asian countries, including the UAE and Singapore, he said.

 

Dr. Reddy's has built new capacities and is deploying a large part of its R&D spending on biosimilar products as part of its long-term growth strategy. The company has a total of seven biosimilar products in its kitty, of which three anti-infection drugs pegfilgrastim, blood cancer drug rituximab, and bevacizumab which is used to treat tumours, were launched in select markets. The remaining four - denosumab which is used to treat osteoporosis, abatacept used in rheumatoid arthritis, cancer drug pembrolizumab and multiple myeloma drug daratumumab – were at various stages of development or in trials.

 

All these products are high-value biosimilars and have the potential to generate significant revenues, Narasimham said and added he expects biosimilar candidates abatacept and pembrolizumab to be blockbusters and potential game changers for the company.

 

Abatacept is currently in phase-III clinical trials and the company expects to file a new drug application with the US Food and Drug Administration by December. If all goes well, it plans to launch the product in early 2027, the CFO said. The drug, used to treat rheumatoid arthritis, has annual sales of $4 billion in the US. The company expects limited competition and believes Dr. Reddy's could be among the first to capture this market opportunity. He said the company is also working on few biosimilar products targeting Indian market mainly focusing on oncology segment.

 

At 1320 IST, shares of Dr. Reddy's were trading at INR 1,286 on the National Stock Exchange, down 1%.   End

 

US$1 = INR 87.36

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Vandana Hingorani

 

 

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