By Rishika Sadam and Kashish Tandon
July 9 (Reuters) – India’s Dr Reddy’s Laboratories said on Thursday that supplies of its generic semaglutide would remain unavailable in India and face disruptions in Canada until at least late October after an impurity issue in the drug’s active ingredient halted production of new batches.
On a call with analysts, CEO Erez Israeli said shipments already made to Canada, where Dr Reddy’s launched its generic semaglutide in May, were unaffected. However, the impurity detected in a newly produced batch of active pharmaceutical ingredient (API) will disrupt supplies for the next few months until production resumes.
An API is the key compound in a drug that produces its therapeutic effect.
Israeli said the impurity was detected during testing as the company scaled up production, and that it expects to identify the root cause within two weeks.
The setback is a blow to Dr Reddy’s ambitions in India’s fast-growing semaglutide market, which opened up after the drug’s patent expired in March, and puts at risk its target of selling 12 million injectable pens in the first year.
The company sold about 39,000 units of generic semaglutide, including solids, through June in India, according to research firm Pharmarack. In comparison, India’s largest drugmaker Sun Pharma sold 63,000 injectable semaglutide units.
“The market is extremely competitive. If they don’t fix the issue soon, they could lose their share to others,” said Vishal Manchanda, an analyst at Systematix Institutional Equities.
Semaglutide is the active ingredient in Danish drugmaker Novo Nordisk’s blockbuster GLP-1 drugs Ozempic for diabetes and Wegovy for weight loss.
The disruption has rippled across the industry, prompting Torrent Pharmaceuticals to recall selected batches of its Semalix injection pens for technical evaluation after a notification from Dr Reddy’s.
In India, Torrent and USV source finished semaglutide doses from the company.
Earlier on Thursday, Dr Reddy’s lost about $678 million in market value after saying it would delay commercial supplies of the generic diabetes drug because certain batches of semaglutide API were found to be “out of specification”.
Israeli said the company was on track to supply 6 million to 7 million semaglutide injection pens in the second half of the year, but acknowledged this would fall short of its earlier target.
“When we gave the earlier target we assumed we would sell between July to September. Now unlikely we will do that,” he said.
There is no impact on patient safety or on the product’s existing global regulatory filings, the company said.
“We see no financial implication or regulatory challenges,” said Surya Patra, senior vice president at Philip Capital, adding that Dr Reddy’s latest target of selling 7 million pens remained above the brokerage’s previous sales forecast.
Shares in Dr Reddy’s closed down 5.9% at 1,269.50 rupees, their steepest one-day decline in more than three years.
($1 = 95.3775 Indian rupees)
(Reporting by Rishika Sadam and Kashish Tandon. Writing by Rishika Sadam and Chandini Monnappa. Editing by Sherry Jacob-Phillips, Mrigank Dhaniwala and Mark Potter)
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