Dr Reddy’s Stock Falls 4% After Canada Notice for Semaglutide: What Investors Should Know

Dr Reddy’s Laboratories has hit a small hurdle in its global growth plan. The company said it received a Notice of Non-Compliance (NON) from the Pharmaceutical Drugs Directorate of Canada for its application to market Semaglutide injection.

The notice asks for extra details and clarifications on its filing, not a rejection. Dr Reddy’s plans to reply within the given time and said it remains confident about the quality and safety of its product.Following the announcement, Dr Reddy’s shares closed around 4% down today as investors reacted to the update.

What is Semaglutide ?

Semaglutide is a medicine used to treat type 2 diabetes and also to manage weight. It works by copying a natural hormone called GLP-1 that helps control blood sugar and reduces appetite. This is the same active ingredient used in Ozempic and Wegovy, two famous drugs made by Novo Nordisk. Because of their popularity and limited supply, demand for Semaglutide has grown sharply across the world, giving generic makers like Dr Reddy’s a big opportunity.

Is It an API or a Full Medicine

Semaglutide is the active pharmaceutical ingredient (API) inside a formulated drug, in this case, an injection. The API is the chemical compound that provides the effect, while the formulation is the finished medicine that patients use. 

Dr Reddy’s filing in Canada was for the finished injectable form, not just the raw ingredient. So the company is trying to launch its own ready-to-use version of Semaglutide injection, a generic alternative to Ozempic

Why This Drug Matters

Semaglutide is at the heart of two huge markets,diabetes and weight loss. It’s seen as one of the most promising drugs globally. For Dr Reddy’s, entering this space could boost both sales and visibility. 

The company has been focusing on complex, high-value medicines that need deeper research and tougher approvals but offer better margins once launched.

Dr Reddy’s Semaglutide Journey

The timing of the NON is notable. Just five days earlier, Dr Reddy’s had shared its Q2 FY26 results highlighting progress on Semaglutide. The company said that India’s Subject Expert Committee (SEC) under CDSCO had recommended approval for the same drug. This shows that the Indian process is already moving in a positive direction. The company also listed Semaglutide as one of its key future products.

Company Strength and Performance

In the same quarterly update, Dr Reddy’s reported ₹8,805 crore in revenue, up 9.8% year-on-year, with an EBITDA margin of 26.7% and a net cash surplus of ₹2,751 crore. Its return on capital stood near 22%. These numbers suggest the company can handle short-term regulatory delays comfortably.

What the Notice Means

A Notice of Non-Compliance means the regulator needs more data before approval. It could relate to quality, testing, or documentation. Such notices are normal in the pharma industry, especially for complex injectables like Semaglutide. Dr Reddy’s said it would provide the requested details soon.

Investor View

For investors, this seems like a short delay rather than a major issue. The long-term growth story remains the same. The company has a strong balance sheet, experience with global regulations, and a clear focus on high-value products.

Final Take

The Semaglutide story at Dr Reddy’s is a classic example of how opportunity and risk coexist in pharma. The drug could become a powerful growth driver, but getting there means navigating a maze of regulations, patents, and data requirements.

For now, investors should see the Canadian NON not as a roadblock but as a speed bump on a promising road. With one regulator asking more questions and another already recommending approval, Dr Reddy’s is still on track to make its mark in the world’s most closely watched drug category.

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