Now Reading: Dr Reddy’s faces post-lenalidomide growth challenge, says Prasad
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Dr Reddy’s faces post-lenalidomide growth challenge, says Prasad
Dr Reddy’s faces post-lenalidomide growth challenge, says Prasad
Dr Reddy's Laboratories Ltd reported a nearly 70% fall in first-quarter profit, with North American sales dropping by more than a third, after a botched scale-up of semaglutide, the active ingredient in…
Dr Reddy's Laboratories Ltd reported a nearly 70% fall in first-quarter profit, with North American sales dropping by more than a third, after a botched scale-up of semaglutide, the active ingredient in blockbuster weight-loss and diabetes drugs. A failed validation batch forced a Rs 2.4 billion charge and cut its Canadian launch target from 12 million pens to 6-7 million. The company's four-year windfall from selling the cancer drug lenalidomide, which analyst Vishal Manchanda estimates earned Indian generic makers $4-5 billion between 2022 and 2026, is also ending as volume limits lift from January 2026, inviting more competition.
Co-chairman G.V. Prasad called the lenalidomide opportunity a "lottery ticket" that will "never happen again", adding the company used the cash to build its capabilities. Dr Reddy's now operates in 66 countries with a net cash surplus and FY26 revenue of nearly Rs 33,600 crore, but must prove it can grow without such outsized wins. Prasad is steering the company toward biosimilars and innovation, while the broader generics industry sees fewer blockbuster patent expirations and innovators moving toward niche therapies.
Indian Opinion Analysis
The end of lenalidomide exclusivity is a reckoning that every Indian generic maker with a limited-competition settlement eventually faces. Dr Reddy's used the cash to build a biosimilars pipeline and a consumer-health business from European nicotine-replacement brands, but neither has yet delivered the profit scale of the cancer drug. The company's next test will be whether it can convert its net cash surplus and 66-country footprint into sustainable growth from within, rather than relying on another lottery ticket. The biosimilar launches in the next 18 months will signal whether the strategy is working.
The semaglutide setback shows how execution risk in complex generics has replaced the old model of low-risk, high-volume copycats. Dr Reddy's had a first-mover advantage in Canada but lost it with a single validation failure, and the delay opens the door for rivals.
Source: livemint.com
This story was synthesised by AI from the source linked above.
