Shares of Dr Reddy’s Laboratories surged over 4% on June 5 as investors cheered for the company’s collaboration with global biotech player Alvotech to co-develop, manufacture and commercialize a biosimilar drug pembrolizumab for global markets.
Pembrolizumab is used in the treatment of numerous cancer types and commanded worldwide sales of $29.5-bn in 2024, meaning that if developed and commercialized, the drug can offer a blockbuster opportunity for Dr Reddy’s. To that effect, it can also offer itself as an avenue to counter the revenue loss that Dr Reddy’s is likely to suffer after another blockbuster cancer drug Revlimid goes off-patent in 2026. For context, revenue contribution from Revlimid was the single biggest growth driver for Dr Reddy’s through FY24 and FY25.
Under the terms of the agreement, the parties will be jointly responsible for developing and manufacturing the biosimilar candidate and sharing costs and responsibilities.
"We are happy to collaborate with Alvotech for the pembrolizumab biosimilar. This demonstrates our ability to develop and manufacture high quality and affordable treatment options for patients worldwide,” Erez Israeli, CEO of Dr Reddy’s said in an exchange filing.
Additionally, Israeli also reiterated the company’s plans to build its oncology portfolio. “Oncology has been a top focus therapy area for us and this collaboration will further enhance our capabilities in oncology, as pembrolizumab currently represents one of the most critical therapies in immuno-oncology,” Israeli added.
Meanwhile, the positive news comes just days after the Delhi High Court halted Dr Reddy’s Laboratories from selling or promoting the diabetes and weight-loss drug semaglutide in India, better known globally as Ozempic and Wegovy, made by Danish pharma giant Novo Nordisk. That said, the court’s May 29 order did offer some leeway as it allowed Indian companies to make and export the drug to countries where Novo Nordisk doesn’t hold a patent.
In an exclusive interaction with Moneycontrol, Dr Reddy's revealed that it has full in-house capabilities to produce a generic version of semaglutide and plans to launch it in several markets, including India, by 2026, once the drug’s patents are expected to expire. The company is betting big on this copycat version, eyeing it as a key revenue driver starting FY27, just in time of Revlimid’s patent expiry.
