Dr Reddy’s Laboratories is pinning its earnings recovery on a handful of new launches, even as the current year is likely to bring another fall in profit. The domestic business grew again in the September quarter, but that was cancelled out by weaker sales of Revlimid in North America and a soft showing in active pharmaceutical ingredients (API).
The drugmaker did post a sharp improvement in operating performance compared with the previous quarter. Even so, FY27 is expected to be another year of declining earnings. A recovery is possible in FY28, depending on how a few key products fare.
Three things will decide the rebound: the relaunch of generic semaglutide, the ramp-up of an abatacept biosimilar in the US, and continued strength at home.
Generic semaglutide: the nearest trigger
The most immediate catalyst is generic semaglutide, due to be relaunched in November 2026. Supplies were temporarily disrupted because of difficulties in scaling up API production.
The company has stuck to its goal of selling six to seven million pens this year. Over the longer term, it sees an annual opportunity of 12 to 15 million pens.
Early volumes are expected to come mainly from Canada and other international markets. Larger geographies are likely to contribute in a meaningful way only later.
Abatacept biosimilar in the US
The second major trigger is the US launch of a biosimilar of abatacept, an arthritis drug. A regulatory decision is expected in December 2026.
Sales may take a few quarters to build up, because the product has to be added to formulary lists first. Still, the company sees meaningful market-share potential. That makes the product one of the most important growth drivers from FY28 onwards.
Steady flow of US generics
In North America, Dr Reddy’s launched 12 products and filed 10 abbreviated new drug applications (ANDAs) in the first half of FY27. It has 80 filings pending, including 27 first-to-file opportunities and three new drug applications (NDAs). This pipeline should keep launches coming at a steady pace.
Moving beyond traditional generics
The company is also widening its biosimilars and specialty portfolio. It has received US approval for a rituximab biosimilar, which is used to treat blood cancer. It has also launched a biosimilar of the cancer drug nivolumab in India. New partnerships and innovative therapies add to the push beyond plain generics.
Domestic business remains a bright spot
India continues to be a source of strength. Chronic therapies have done well and the specialty portfolio is growing, helping Dr Reddy’s outperform the Indian pharmaceutical market. The company expects a healthy pipeline of launches to support growth in the coming years.