Onesource Specialty Pharma undertakes the final stage of production before the semglutide drug is shipped to pharmaceutical companies. It operates as a backend supplier and is largely agnostic to pricing and geography, supplying products at the factory gate to its clients.
It is the sole fill-and-finish partner for Dr Reddy’s Laboratories‘ semaglutide injectable programme, making it directly part of the global GLP-1 opportunity cycle.
Dr. Reddy’s Laboratories on Thursday informed the exchanges regarding concerns of a delay in the semaglutide supply. It said certain batches of the drug were found to be out of specification due to an issue with regards to the Active Pharmaceutical ingredient (API) used in the product.
The company informed the exchanges that it is investigating the root cause and taking the appropriate measures to ensure product quality.
The company warned that until the issue is resolved, the product’s commercial supply would be delayed for a certain while. It also clarified that there is no impact on patient safety or on the product’s existing global regulatory filings.
As a result of this announcement, the stock of Dr. Reddy’s had declined 6% in Thursday’s session and is down another 1.5% on Friday.
Apart from the semaglutide concern, the Dr Reddy’s Laboratories management, in an investor meet on Thursday, reiterated strong demand, unchanged long-term strategy and its partnership with OneSource, with alternate API sourcing progressing as backup, brokerage firm Morgan Stanley said.
On another note, Vishal Manchanda, Pharma Analyst at Systematix Group, told CNBC-TV18 on Thursday that Dr Reddy’s Laboratories’ growth outlook from its semaglutide opportunity remained largely intact, provided that the company resolves the supply issues within the next month.
He said semaglutide is a technically complex peptide, which makes the manufacturing scale-up challenges relatively common. He said the impact on earnings would depend on how quickly the company restores normal production. However, he said a longer disruption could affect revenue expectations and competitive position as more players enter the market.
Shares of OneSource Specialty Pharma declined 7.4% to hit an intraday low of ₹1,506.1 apiece on Friday. The stock was down 2.1% at ₹1,591.2 apiece after recovering from the lows. The stock has declined 10.7% this year, so far.
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