Dr Reddy's Labs falls 6% after firm gets non-compliance notice for semaglutide in Canada

Dr Reddy's Labs

The shares of Dr Reddy's Laboratories dropped nearly 6 percent on October 30 after the company announced that it has received a non-compliance notice from Canada's drug regulator for its Semaglutide Injection.

The shares of the company were trading at Rs 1,180.90 apiece, the lowest level seen by the stock in more than five months. It is currently the top loser on the Nifty Pharma index, which itself is down 0.7 percent.

Here's what Dr Reddy's said:

In an exchange filing, the pharma major announced that the non-compliance notice pertains to its Abbreviated New Drug Submission (ANDS) for Semaglutide injection. The notice outlines requests for additional information and clarifications on specific aspects of the submission, it said.

Dr Reddy's said that it will submit a response at the earliest and well within the given time period. "We remain confident in the quality, safety and comparability of our proposed product and remain committed to making this important therapy available to patients in Canada and other markets at the earliest. We appreciate the continued support of our stakeholders and will share further updates as appropriate," it added.

Here's what analysts say:

According to analysts, this development could delay the launch of its new injection. Semaglutide is the active ingredient of Denmark-based Novo Nordisk's popular weight-loss drug Wegovy and diabetes medicine Ozempic.

Analysts at JP Morgan said this is expected to delay the planned first-to-market launch of Dr Reddy’s Semaglutide injection in January 2026, eroding Dr Reddy's first-mover advantage. This also puts at risk estimated Canadian semaglutide revenues of $30 million for fiscal year 2026 and $100 million for the financial year 2027.

Analysts at Emkay Global expect a six-month delay in the launch of the injections in Canada.

Here's why Shaily Engineering shares dropped 17%:

Shaily Engineering Plastics shares dropped more than 17 percent to hit a day's low of Rs 2,115 apiece after Dr Reddy's announcement. As per Shaily Engineering's annual report for the financial year 2025, Dr. Reddy's was among the top clients for the company in the pharmaceutical sector.

Dr Reddy's Q2 Results:

The company on October 24 reported a 7 percent year-on-year rise in net profit to Rs 1,347.1 crore in Q2 FY26. This is lower than the Rs 1,450 crore net profit estimated by brokerages polled by Moneycontrol.

The generic drugmaker's second-quarter profit came below estimates, hurt by stiff competition for the generic version of blockbuster cancer drug Revlimid in its key North America market.

The pharmaceutical major's revenue from operations meanwhile rose nearly 10 percent YoY to Rs 8,828 crore in the July-September quarter of the financial year 2026, surpassing an estimate of around Rs 8,700 crore. It had earlier reported revenue from operations at Rs 8,038 crore for the corresponding quarter of the previous financial year.

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