Dr Reddy's Laboratories Shares Drop 6% After Canadian Regulatory Notice for Semaglutide Injection

Shares of Dr Reddy's Laboratories saw a significant plunge of 6% in Thursday's trading, reaching an intraday low of ₹1,180.90. This sharp decline followed the company's announcement that it received a notice of non-compliance from the Pharmaceutical Drugs Directorate in Canada. The notice pertains to their Abbreviated New Drug Submission (ANDS) for semaglutide injection.

Dr Reddy's Laboratories issued a statement assuring stakeholders that they will submit a response to the Canadian authorities at the earliest and within the stipulated timeframe. The company expressed confidence in the quality, safety, and comparability of their proposed semaglutide product, reiterating their commitment to making this therapy available to patients in Canada and other markets.

The news had a ripple effect on the Indian stock market, particularly the pharmaceutical sector. Dr Reddy's Laboratories, holding a 9.8% weightage in the Nifty Pharma index, contributed to the index's 0.69% decline. Other pharmaceutical stocks like Zydus Lifesciences, Sun Pharmaceutical Industries, and Lupin also experienced a downturn, falling between 1% and 1.60%.

A report from Motilal Oswal Financial Services highlighted that the timing of the notice is notable, as Dr Reddy's was positioned as the first generic filer and was preparing for a January 2026 launch. The company had projected annualized revenue of $300 million from the Canadian semaglutide market initially. The non-compliance notice poses a risk of delaying Dr Reddy's opportunity to capture this early-market share.

Impact: This regulatory setback could potentially delay the product launch, impacting expected revenues and market share gains, and may lead to further stock price volatility until the issue is resolved. Impact Rating: 7/10

Difficult Terms: Abbreviated New Drug Submission (ANDS): A regulatory pathway in the United States (and similar processes in other countries like Canada) used by companies to get approval for generic versions of existing drugs. It requires demonstrating that the generic drug is the same as the brand-name drug in dosage, safety, efficacy, and intended use. Semaglutide Injection: A medication used to treat type 2 diabetes and chronic weight management. It belongs to a class of drugs called GLP-1 receptor agonists. Notice of Non-compliance: A formal communication from a regulatory authority stating that a company or its submission does not meet certain required standards or regulations. Pharmaceutical Drugs Directorate: The regulatory body in Canada responsible for overseeing the safety, efficacy, and quality of drugs sold in the country.