The American Depositary Receipts of Dr. Reddy's Laboratories Ltd. fell 9.69% to $13.19 in New York on Wednesday after the company's plan to launch a generic version of a popular weight-loss drug in Canada faced a regulatory setback.
The company had received a Notice of Non-Compliance from the Pharmaceutical Drugs Directorate of Canada, the company said in an exchange filing.
The notice pertains to Dr. Reddy's Abbreviated New Drug Submission for Semaglutide Injection—a drug widely used for weight management and diabetes control.
According to the company, the NON seeks additional information and clarifications on specific aspects of its submission. Dr. Reddy's said it plans to provide a detailed response “at the earliest and well within the stipulated time period.”
The Hyderabad-based pharmaceutical firm emphasised its confidence in the quality, safety, and comparability of its proposed product. “We remain committed to making this important therapy available to patients in Canada and other markets at the earliest,” the company said in a statement, adding that it would share further updates as appropriate.
Semaglutide, the active ingredient in drugs such as Ozempic and Wegovy, has become one of the world's most sought-after treatments for obesity and diabetes. Any delay in regulatory approvals could postpone Dr. Reddy's entry into this lucrative segment.
The setback comes at a time when global demand for weight-loss medications is surging, making generic opportunities particularly valuable for large generics makers like Dr. Reddy's.
Dr Reddy's Share Price Today
The business update was shared after market hours. The stock settled 2.99% lower at Rs 1,250.90 apiece on the NSE, compared to a 0.45% advance in the benchmark Nifty 50. The shares earlier during the day fell as much as 4.22% to Rs 1,235 per share.
DR Reddy's shares have fallen 1.87% in the last 12 months and 9.91% year-to-date.
Out of 41 analysts tracking the company, 16 maintain a 'buy' rating, 11 recommend a 'hold' and 14 suggests 'sell', according to Bloomberg data. The average 12-month consensus price target of Rs 1,316.79 implies an upside of 5.3%.
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