Dr Reddy’s Laboratories announced last week that it has halted manufacturing and supply of its semaglutide injectable after detecting an impurity in the active pharmaceutical ingredient. The company’s shares fell 6 per cent on Thursday and dropped another 3 per cent the next day. In its exchange filing, Dr Reddy’s said it is investigating the root cause and will delay supplies until the issue is resolved, noting no impact on patient safety for product already on the market.

CEO Erez Israeli told analysts that production could resume in late October or early November at the earliest. The firm had originally aimed for 12mn pens in the first year but revised the forecast to 6‑7 million. The disruption also affected Torrent Pharmaceuticals, which uses Dr Reddy’s API for its Semalix injections and issued a voluntary recall of select batches as a precaution.

Dr Reddy’s is a major player in injectable semaglutide in India and Canada. Although many Indian generic makers entered the market after the drug went off patent in March, offering it for Rs900‑Rs2,000 a month versus Novo Nordisk’s roughly Rs12,000, the setback threatens to erase Dr Reddy’s early‑mover advantage in the blockbuster weight‑loss and diabetes treatment.

Most brokerages have cut price targets, with some downgrading the stock from “buy” to “hold”. The issue could weigh on results for the next few quarters and reignite concerns about the safety of India’s generic drugs.