Industry Odisha Bureau, Oct 26: Biosimilars and a strong home business support recovery hopes as FY27 earnings stay under pressure.
Dr Reddy’s Laboratories is counting on new products to revive its earnings. Generic semaglutide and biosimilars sit at the centre of that plan. FY27, however, is expected to bring another year of declining earnings. A recovery could follow in FY28, according to an Economic Times analysis.
The September quarter showed mixed results. Domestic formulations continued to grow. Yet lower Revlimid sales in North America offset that gain. Revlimid is the brand name for lenalidomide, a blood cancer treatment. The active pharmaceutical ingredient (API) business also weakened. Operating performance still improved sharply from the previous quarter. That sequential gain does not signal a year-on-year earnings recovery.
Generic semaglutide is the nearest trigger. Semaglutide is a GLP-1 receptor agonist used in diabetes and weight-management medicines. Dr Reddy’s plans to relaunch its generic version in November 2026. Earlier supply was disrupted by difficulties in scaling up API production. The analysis describes these as temporary scale-up challenges. Reliable supply will be essential for winning market share.
The company has reiterated a target of six to seven million pens this year. It sees a longer-term annual opportunity of 12 to 15 million pens. Both are management estimates, not confirmed sales. Canada and other international markets are expected to lead early volumes. Larger markets may contribute meaningfully only later.
The second catalyst is a biosimilar of abatacept, an arthritis drug. Unlike a generic, a biosimilar is highly similar, not identical, to its biological reference medicine. A US regulatory decision is expected in December 2026. Approval has not yet been granted. Even after any launch, uptake may take several quarters. Products must first be added to formularies, the lists of drugs insurers cover. The company sees meaningful market-share potential from FY28 onwards.
The North American pipeline adds depth. In the first half of FY27, Dr Reddy’s launched 12 products there. It filed 10 Abbreviated New Drug Applications (ANDAs), used to seek generic approvals. Another 80 filings are pending, including 27 first-to-file opportunities. Three New Drug Applications (NDAs) are also among them. First-to-file status can bring advantages, but exclusivity is not guaranteed. Pending applications also carry no assurance of approval.
The business is also moving beyond traditional generics. Dr Reddy’s secured US approval for a rituximab biosimilar, used against certain blood cancers. It launched a biosimilar of nivolumab, a cancer drug, in India. New partnerships and innovative therapies further broaden the portfolio.
At home, the business remains a bright spot. Chronic therapies and a growing specialty range have driven its performance. The company has outpaced the wider Indian pharmaceutical market, the analysis notes. That strength diversifies earnings but does not fully offset North American weakness.
An FY28 rebound will depend on execution. The semaglutide relaunch must succeed, and abatacept must win approval and adoption. Domestic growth will also need to hold. Competition, pricing pressure and possible delays remain real risks.
