The pharmaceutical landscape in India witnessed a significant legal development on Friday, May 31, when the Delhi High Court barred Dr Reddy's Laboratories Ltd. and OneSource Specialty Pharma Ltd. from selling semaglutide in the Indian market. This action follows a patent infringement suit filed by global pharma major Novo Nordisk, which claims ownership of the semaglutide patent rights in India.

The ruling caused shares of Dr Reddy’s and OneSource to decline sharply on Monday, June 2, with losses of up to 3% intraday, reflecting investor nervousness over the legal implications and potential disruption in the business pipeline.

What is Semaglutide and Why Is It Important?

Semaglutide is a glucagon-like peptide-1 (GLP-1) receptor agonist that has gained prominence for treating type 2 diabetes and obesity. It is the active ingredient in Novo Nordisk’s globally recognized products like Ozempic and Wegovy. With the global demand surging, Indian pharmaceutical companies are seeing this as a lucrative opportunity to manufacture and export this high-demand medication.

Details of the Case and Legal Timeline

The case has its roots in the rapid rise in interest in semaglutide’s commercial potential. Here’s how it unfolded:

• December 2024: Dr Reddy’s Laboratories received a manufacturing licence for semaglutide.

• April 2025: The company commenced production of semaglutide.

• May 2025: Novo Nordisk issued a cease-and-desist notice, claiming patent violation.

• May 14, 2025: Dr Reddy’s challenged Novo’s petition in court.

• May 26, 2025: Novo Nordisk officially filed a patent infringement suit against Dr Reddy’s and OneSource.

The court ruling does not impact the companies’ right to manufacture and export semaglutide, only domestic sales are currently restricted.

The Allegations by Novo Nordisk

Novo Nordisk claims that:

• Dr Reddy's and OneSource are importing large quantities of the semaglutide API (active pharmaceutical ingredient).

• They are manufacturing formulations in India and exporting them commercially.

• OneSource is also allegedly importing and exporting finished semaglutide injections in large volumes.

The Danish company argues this violates the Indian Patent Act, which prohibits the making, using, offering for sale, selling, exporting, or importing of a patented drug without authorization.

Impact on Pharma Stocks and Market Sentiment

Following the Delhi High Court's decision:

• Dr Reddy’s shares fell nearly 3% during intraday trading on June 2.

• OneSource stock declined 3.07%, touching an intraday low of ₹1,862.9.

• Shares of Zydus Life, another player in the GLP-1 sector, also dropped 1.4%, touching ₹1,232.6.

The verdict has sparked caution among investors, especially those betting on Indian companies benefiting from the GLP-1 therapy boom.

Can Indian Companies Still Export?

Yes. Despite the restriction on domestic sales, the Delhi High Court has not barred manufacturing and exporting semaglutide. India’s pharmaceutical export business is thriving, and companies are increasingly using India as a global manufacturing hub for off-patent and soon-to-be-off-patent drugs.

For instance:

• Canada’s patent protection on semaglutide ends in January 2026, which opens future opportunities for Indian firms targeting that market.

• Both Dr Reddy’s and OneSource are expected to leverage this time frame to scale up export strategies while the local sales ban is in place.

Novo Nordisk’s Stand on Innovation and IP Protection

Novo Nordisk responded strongly, reiterating its intention to protect its intellectual property rights in India. The company stated:

“Our semaglutide patents are protected in India, and we expect continued support to foster innovation and bring new treatments to patients.”

However, the company refrained from commenting directly on the case, calling it a sub-judice matter.

Dr Reddy's Maintains Silence

As the case is still under judicial review, Dr Reddy’s Laboratories chose not to make any public statement, emphasizing that it will not comment on ongoing litigation.

This legal silence is a standard practice among listed firms, as any comment could potentially influence the legal process or impact stock performance.

What Lies Ahead?

Experts believe that Novo Nordisk may file an appeal to further strengthen its patent claims in India. Meanwhile:

• Indian companies will continue lobbying for clarity around patent expiration dates and manufacturing rights.

• There is likely to be a ripple effect on other companies in the semaglutide supply chain, including suppliers, API manufacturers, and exporters.

• Judicial clarity will be crucial as India balances IP protection with its generic drug manufacturing strength.

Conclusion: A High-Stakes Legal Battle with Global Implications

This case marks a critical moment in India’s pharmaceutical regulatory landscape, especially as the country increasingly becomes a hub for GLP-1 and obesity-treatment manufacturing.

While the short-term impact has hurt companies like Dr Reddy’s and OneSource, the medium to long-term outlook depends on court outcomes, global patent timelines, and export strategies.

As of now, the legal ruling restricts Indian market access but leaves the export window wide open, keeping hopes alive for revenue through overseas markets.

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