Dr Reddy's extends slide as semaglutide setback threatens first-mover edge

Dr Reddy's Laboratories slid as much ​as 3.7% on Friday after warning of ‌a generic semaglutide supply disruption, raising concerns ​over its edge in the ⁠highly competitive diabetes market and prompting analysts to cut earnings views.

DRL’s semaglutide supply hits a stumbling block, affects other companies too

The drugmaker's stock was last trading ‌2.2% lower at ₹1,241.90, and was the top loser on the ‌pharma index , which was down ‌0.2%. ⁠It had lost 6% on Thursday after ⁠the announcement.

The supply disruption has cast doubt on Dr Reddy's ability to capitalise on its early lead ​in India's semaglutide ‌market, with brokerages warning that a prolonged delay could allow competitors to gain ground, weaken pricing power and slow earnings growth.

Dr Reddy's ‌expects supplies to resume in late ​October or early November.

Dr Reddy’s delays Semaglutide supplies after API quality issue

Analysts at Emkay Global said the setback weakened the investment ⁠case for semaglutide and increased the risk of further earnings downgrades, cutting its fiscal ‌2027 earnings estimates for the company by about 7%.

Systematix downgraded the stock to "hold" from "buy", saying the disruption could erode Dr Reddy's first-mover advantage and allow rivals to enter the market earlier, potentially hurting pricing power and ‌market share gains.

The brokerage cut its fiscal 2028 ​semaglutide revenue estimate to $100 million from $150 million and lowered its target price to ₹⁠1,398 from ₹1,475 .

The drugmaker wiped $678 ⁠million off its market value on Thursday after it halted commercial supplies of ‌semaglutide injections following the detection of an unspecified impurity during the scale-up of active ​pharmaceutical ingredient production.