Dr. Reddy's Receives Health Canada Approval for Generic Semaglutide

Health Canada has approved a generic Semaglutide Injection, a version of Novo Nordisk's Ozempic®, with the approval effective April 28, 2026. This marks the first generic approval in a G7 market for Dr. Reddy's Laboratories.

What Happened

OneSource Specialty Pharma's partner, Dr. Reddy's Laboratories, has secured approval from Health Canada for its generic Semaglutide Injection. This development solidifies OneSource's position as the Contract Development and Manufacturing Organization (CDMO) responsible for the drug's scale-up and commercial production. Manufacturing will take place at OneSource's U.S. FDA-approved facility in Bengaluru, India. While the approval is a positive step, past delays and ongoing competition present potential risks for the product's market entry.

Why This Matters

The approval validates OneSource's manufacturing expertise and its U.S. FDA-approved facility for producing complex injectables. This success strengthens its ongoing partnership with Dr. Reddy's and signifies potential new revenue streams as OneSource prepares for commercial supply of this globally significant medication.

Background: OneSource and Dr. Reddy's

OneSource Specialty Pharma operates as a dedicated CDMO focused on complex pharmaceutical products, including biologics and sterile injectables. Its Bengaluru facility has undergone U.S. FDA inspections, most recently receiving a Voluntary Action Indicated (VAI) classification in June 2025 following a March 2025 inspection, which confirmed continued compliance.

However, the company faced financial challenges in late 2025 and early 2026, reporting a net loss in Q3 FY26. This was partly due to delayed regulatory approvals for Semaglutide in Canada, which impacted revenue.

Dr. Reddy's Laboratories, the partner company, has previously dealt with regulatory scrutiny. A U.S. Department of Justice (DOJ) inquiry into the Foreign Corrupt Practices Act (FCPA) was closed in March 2026 without enforcement action. Additionally, the company received a U.S. Food and Drug Administration (FDA) Form 483 with five observations for its Hyderabad facility in September 2025.

Impact of the Approval

• Enhanced Partnership: The approval strengthens the collaborative relationship between OneSource and Dr. Reddy's.
• Manufacturing Validation: It confirms the capability of OneSource's Bengaluru facility for large-scale, regulated manufacturing.
• Commercial Supply Potential: This opens avenues for commercial revenue generation from supplying the generic drug.
• Market Access: It supports OneSource's standing in the global CDMO market for complex injectables.

Risks to Watch

• Competition: The market entry of generic Semaglutide is expected to lead to significant price competition. Generics in Canada have historically sold for 45% to 90% less than their brand-name counterparts.
• Execution: Potential for further delays in scaling up production or commencing commercial supply could affect OneSource's financial performance, similar to past revenue deferrals.

Peer Comparison

OneSource's peers in the Indian CDMO sector include Syngene International, Piramal Pharma Solutions, and Laurus Bio, all offering advanced manufacturing for complex pharmaceuticals. Dr. Reddy's itself is a major pharmaceutical player that also competes in certain aspects of API and formulation manufacturing, though it is acting as a partner in this specific instance.

Financial and Operational Metrics

OneSource's sterile product division in Bengaluru also received an EU Good Manufacturing Practice (GMP) Certificate of Compliance on April 27, 2026, complementing its existing U.S. FDA and Health Canada approvals. The company reported Q3 FY26 revenue of ₹2,903 million, a decrease from ₹3,926 million in Q3 FY25.

What to Track Next

• The timeline for OneSource commencing commercial manufacturing and supply for Dr. Reddy's.
• Any updates on the pricing strategy and market penetration of the generic Semaglutide injection.
• OneSource's financial performance in subsequent quarters, especially revenue derived from this partnership.
• Further regulatory approvals for generic Semaglutide from other global health agencies.
• Capacity utilization and operational efficiency at OneSource's Bengaluru facility.