This Indian pharma company sees a big opportunity in generic versions of Ozempic and Wegovy
Dr. Reddy ‘s Laboratories is betting big on a new wave of growth fueled by a global demand for weight-loss drugs — by launching its own lower-cost version of semaglutide, the blockbuster ingredient behind Wegovy and Ozempic. The Indian pharmaceutical company plans to launch its generic version of the drug in 87 countries by 2026, CEO Erez Israeli said. “This is a very, very important product because it’s becoming more and more as a first-line therapy for type 2 diabetes, as well as for weight loss,” he told CNBC. In 2022, more than 2.5 billion adults globally were overweight, of whom 890 million were obese, according to the World Health Organization . The International Diabetes Foundation says that around 589 million people worldwide have diabetes, of whom over 90% have type 2 diabetes. Their reported effectiveness in treating obesity and diabetes had led to a supply crunch for semaglutide, with major pharmaceutical giants such as Novo Nordisk and Eli Lilly scrambling to meet the demand. That supply gap, combined with expiring patents in India and Brazil, has opened up an opportunity for Dr. Reddy’s to be a first mover in dozens of emerging markets. “The reason that so many markets can be open next year is because in many of these markets, the product was never launched due to capacity constrained by the innovator,” Israeli said. “We have a chance to bring the product for the first time to these countries.” Novo Nordisk is behind brands like Wegovy, which is used for weight loss only, and Ozempic and Rybelsus, which are treatments for type 2 diabetes. Eli Lily owns brands such as Tirzepatide, Mounjaro and Zepbound. Dr. Reddy’s expects its product to be a significant contributor to revenue over the coming years, with Israeli noting: “It is going to be an important product for us. We can certainly see it is growing at the pace to get to hundreds of millions of dollars in revenue.” Goldman Sachs had previously projected that the GLP-1 market could exceed $100 billion in annual sales by 2030 . However, high costs and limited availability have made access to these drugs largely concentrated in wealthier countries. Dr. Reddy’s is not just planning to launch its generic version of the drug in 2026, but is already preparing for launches in countries that may open up in 2027 or 2028. The company is also eyeing additional GLP-1 generic products in the future. That market share may be easier to capture in some countries where Dr. Reddy’s could be the only player—at least temporarily. “It could be a situation in some markets where we’ll be the main one, or the only one for a certain period of time until the others will come.” Crucially, Israeli believes that broader access to generics will lower the cost of GLP-1 and improve affordability in markets where it’s still an “out-of-pocket” product for most people. DRREDDY-IN YTD line Dr Reddy’s falls short of quarterly profit expectations The pharmaceutical company missed quarterly profit expectations on Wednesday, with its net profit increasing by 2% to 14.18 billion rupees ($164.2 million), below analysts’ estimate of 14.94 billion rupees, according to LSEG data. While the company is looking outward, Dr. Reddy’s continues to operate in competitive markets like the U.S., where its product portfolio is evolving. Israeli also acknowledged the crowded nature of the U.S. generics market. “The business model in the United States is actually, in a way, that you have multiple competitors on every product. This is the nature of the business. It has its opportunities as well as its risks.”
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