After Lenalidomide, Dr Reddy’s turns to obesity drugs, biosimilars and consumer health

After years of windfall gains from cancer drug Lenalidomide in the US market, Dr. Reddy’s Laboratories is entering a new phase where future growth is expected to come from obesity therapies, biosimilars, consumer healthcare and branded markets.

The Hyderabad-based drugmaker’s latest performance reflects the pressure emerging as Lenalidomide sales decline sharply, particularly in North America. But it also points to where the company is directing investments as pricing pressure intensifies in traditional generics markets. 

During the quarter, Dr Reddy’s launched generic Semaglutide injection in India under the brand name Obeda immediately after loss of exclusivity and also received marketing authorisation for generic Semaglutide tablets from the Drugs Controller General of India. 

Semaglutide, widely used globally for diabetes and obesity treatment, has emerged as one of the most closely watched therapy areas for pharmaceutical companies amid rising demand for metabolic disease treatments.

At the same time, the company continues to increase its presence in biosimilars and specialty products. During the quarter, the US Food and Drug Administration accepted for review the biologics licence application for the intravenous presentation of Dr Reddy’s abatacept biosimilar in the US. 

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Consumer healthcare is also becoming a larger part of the company’s portfolio. Dr Reddy’s said integration of 95% of the acquired nicotine replacement therapy business had been completed by March 2026. Europe revenues rose 55% year-on-year in FY26 to ₹5,550 crore, supported by contributions from the nicotine replacement therapy portfolio. 

India business remained another key growth driver. Revenues from India rose 20% year-on-year in the March quarter and 16% for the full year, supported by new launches, price increases, higher volumes and acquired portfolios. 

The company’s North America business, however, remained under significant pressure. Revenue from the region fell 51% year-on-year in the March quarter to ₹1,756 crore and declined 22% for the full year to ₹11,374 crore, largely due to lower Lenalidomide sales and a one-time shelf stock adjustment related to the product. 

“Our performance this year reflects the impact of lower Lenalidomide sales and several one-offs. The resilience of our branded businesses and currency tailwinds helped partially mitigate this impact,” Co-Chairman and Managing Director G V Prasad said. He added that the company remained focused on improving margins through cost efficiencies and portfolio optimisation while continuing investments in biosimilars, consumer health and innovation. 

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At the same time, Dr Reddy’s is becoming more selective in parts of its innovation pipeline. The company discontinued certain CAR-T therapy programmes during the quarter as part of portfolio rationalisation and took impairment charges linked to those assets. 

R&D spending for FY26 declined 12% year-on-year to ₹2,406 crore, partly due to lower development spending in biosimilars after completion of a large part of investments related to abatacept. 

For FY26, Dr Reddy’s reported consolidated revenue growth of 3.2% to ₹33,593 crore, while profit after tax declined 24% to ₹4,285 crore.

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