With markets all over the world seeing multiple semaglutide variants, what differentiates Dr Reddy’s play in this category and how significant is the opportunity?
Our competitive edge in products such as semaglutide comes from four key strengths: Being among the first to launch in multiple markets, achieving scale early, building strong scientific capabilities, and leveraging our global market-access network. Our presence in more than 80 markets allows us to engage with physicians, patients and retailers ahead of competitors while our scale and backward integration help us stay cost-competitive as pricing pressure increases over time. We also see continuous innovation in formulations, devices and oral versions as critical differentiators. In addition, our international footprint, expertise in the local market, and access to capital position us strongly in what will be a highly capital-intensive market.
Any indication of volumes for semaglutide you are targeting?
We are still operating at a market scale of a few million units, largely constrained by industrywide capacity bottlenecks. But we expect those limitations to ease by late 2026. Over the next two to three years, as manufacturing capacity ramps up and more markets open, the opportunity for semaglutide could expand into a multibillion-dollar market. As the volumes increase, pricing is expected to moderate, making scale and cost efficiency increasingly critical.
Given the scale you are targeting, do you foresee challenges on supply chains, manufacturing capacity, assembly or cold-chain infrastructure?
We are confident in our ability to manage the rampup and supply the market as demand grows.
What is your strategy for North America post-lenalidomide (an oral immunomodulatory drug used to treat cancer)?
The United States (US) business is evolving beyond traditional generics into a diversified portfolio driven by biosimilars, consumer health and, eventually, innovative medicines. Generics will remain important for scale and global rollouts in products, with double-digit growth due to a relatively low base and a large number of launches. The bigger opportunity lies in biosimilars, particularly medical-benefit products, where pricing pressure is lower and payer dynamics drive market share. We expect biosimilars to become a significant growth engine and potentially surpass generics by the early 2030s. Consumer health is also growing in double digits from a smaller base, while innovative medicines represent a long-term opportunity. Over time, the US and India will remain the company’s core markets, but the composition of the US business will shift towards these newer growth segments.
In the US, apart from semaglutide, are there specific therapeutic areas in which you are looking to build leadership positions?
Globally, oncology is the therapeutic area that interests us the most. It remains one of the biggest unmet medical challenges, and much of the innovation we are bringing to markets such as India is centred around oncology. Over time, we expect oncology to become our largest focus area both in India and globally.
What is the potential market size for semaglutide in Canada and what market share is Dr Reddy’s expecting as an early entrant?
The market size is about 12 million pens (injector devices). So, it will ramp up at a certain point, but I cannot exactly say how much we will sell. The first phase in the Canadian market will focus less on the number of players and more on supplying the market and getting people used to the therapy. There will be higher prices and lower volumes initially, but as time passes, generic penetration will increase. We are not launching alone. Apotex has also received approval. Novo Nordisk also has its version.
What kind of competition and price erosion do you expect in Canada?
Canada has a list-price mechanism by which prices decrease as more players enter the market. The main opportunity for Canada is that it is the first market in the Western world to open up. Over the years, other markets will be bigger than it.
How do semaglutide and its generics compete with tirzepatide-based brands such as Mounjaro and Zepbound?
Tirzepatide is an amazing product, and so is semaglutide. Eventually, both products will replace older therapies for diabetics, and both have a weight-loss indication. But I expect semaglutide as a molecule to grow significantly because it will be much cheaper.
How do margins in semaglutide generics compare with your existing complex injectables portfolio?
Absolutely accretive for sure, in the beginning. Those will moderate, and eventually semaglutide should have normal margins. But semaglutide will shape up with lower quantities and a better price initially. Over time, there will be more quantities and economies of scale. The cost of each component will also decrease.
Do you expect the Canadian health care system to push generic adoption?
Doctors will prescribe what is best for patients. I am sure that generic semaglutide will provide the Canadian system significant budget relief.
What will your global semaglutide strategy look like as the molecule loses exclusivity across markets?
We will stay in this molecule and also other peptides for many years. There will be a generic version for all other semaglutide versions in all the countries. We are also developing all the other peptides that will come into play. Eventually, we want these products in all markets for many years.
Does the company plan to increase its semaglutide capacity beyond the current 12 million pens annually?
The outlook remains unchanged, especially after receiving approval in Canada, with Brazil also expected to contribute meaningfully. As indicated during the analyst call, we expect demand to reach approximately six-seven million by the end of this calendar year.
Are you exploring new markets?
Since 2018, the company has reduced its dependence on the US by expanding into over 80 markets, building a direct presence in more than 60 of them. The company sees Brazil, Germany, Russia and China emerging as key growth markets, with a broader international expansion helping drive scale, resilience and long-term sustainability.
How large is the biosimilar opportunity for Dr Reddy’s now, especially in regulated markets?
We are still at an early stage in biosimilars, with launches such as Rituximab, Denosumab and Bevacizumab already underway in Europe. In the US, Abatacept is expected to be the first major product that establishes Dr Reddy’s as a meaningful player. The company plans to build a steady pipeline through both internal development and partnerships, which management sees as critical in accessing products and reducing scientific as well as regulatory risks. Over time, the biosimilar business is expected to scale up into a multi-billion-dollar segment for us.
What are the priorities Dr Reddy’s is targeting this financial year?
We are focused on two broad ones — improving the productivity of our existing business and building the next phase of growth. On the core business, we are targeting double-digit growth and a 25 per cent Ebitda (earnings before interest, tax, depreciation and amortisation) margin. At the same time, we are investing in future growth engines through launches in generics, complex generics, peptides, biologics, consumer health, and innovation licensing.
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