Alvotech partnership to co-develop biosimilar candidate to Keytruda®
Hyderabad-headquartered Dr. Reddy’s Laboratories Ltd (BSE: 500124 | NSE: DRREDDY | NYSE: RDY | NSEIFSC: DRREDDY) remains bullish on global business prospects as it reported 11% Y-on-Y increase in revenue to Rs.85.452 billion for Q1 2026, which ended 30 June 2025. But Q-on-Q it was flat.
Profit after tax was up 2% Y-on-Y at Rs.14.178 billion and down 11% Q-on-Q for the first quarter.
Growth during the quarter was broad-based, aided by contributions from the acquired Consumer Healthcare portfolio in Nicotine Replacement Therapy (NRT) and sustained performance in our branded markets https://www.bseindia.com/.
Commenting on the results, Co-Chairman & MD, G V Prasad said on 23 July, “We delivered double-digit growth this quarter over the same period last year, reflecting our strength in branded markets and positive momentum in the Nicotine Replacement Therapy portfolio. The pricing pressure on Lenalidomide is expected to intensify in the US generics market. We remain focused on strengthening our base business by delivery of our pipeline assets, improving overall productivity and business development http://who.int.”
Key Business Highlights for Q1FY26
Expanded partnership with Alvotech to co-develop, manufacture and co-commercialize pembrolizumab, a biosimilar candidate to Keytruda®.
Expanded collaboration with Sanofi to launch BeyfortusTM (Nirsevimab), a novel drug for preventing Respiratory Syncytial Virus (RSV) in India https://www.nseindia.com/.
Launched Sensimune in India, an immunotherapy product for house dust mite-induced allergies, in partnership with ALK-Abelló.
Global Generics (GG)
Q1FY26 revenues at Rs.75.6 billion, YoY growth of 10% and flat QoQ.
North America
Q1FY26 revenues at Rs.34.1 billion, YoY decline of 11% and QoQ decline of 4%.
The decline was primarily due to increased price erosion in certain key products including Lenalidomide.
During the quarter, we launched five new products in the US.
“We filed one new Abbreviated New Drug Application (ANDA) with the USFDA during the quarter,” said Prasad.
Filings pending approval from USFDA – 73 includes:
70 ANDAs (43 are Paragraph IV applications, and 22 may have a ‘First to File’ status and
3 New Drug Applications (NDAs) filed under Section 505(b)(2)
Europe
Q1FY26 revenues at Rs.12.7 billion, YoY growth of 142% and flat QoQ growth. This includes revenues from the acquired NRT business.
NRT at Rs.6.7 billion, QoQ growth of 12%.
Germany at Rs.3.2 billion, YoY growth of 13% and QoQ decline of 11%.
UK at Rs.1.7 billion, YoY growth of 10% and QoQ decline of 20%.
Rest of Europe at Rs.1.2 billion, YoY growth of 30% and QoQ growth of 9%.
The growth in Europe was largely driven by revenues from the acquired NRT portfolio and incremental contributions from new product launches though partly offset by price erosion. QoQ performance remained stable as the impact of price erosion was balanced by gains from forex and increased volumes.
During the quarter, Dr Reddy launched 13 new products in the region.
India
Q1FY26 revenues at Rs.14.7 billion, YoY growth of 11% and QoQ growth of 13%.
Growth for the quarter was driven by introduction of new products, price increases and commercial execution.
During the quarter, five new brands were launched.
Includes two Innovative assets Beyfortus (RSV Vaccine) & Sensimmune (Acarizex Slit)
Emerging Markets
Q1FY26 revenues at Rs.14.0 billion, YoY growth of 18% and flat QoQ.
YoY growth was largely driven by increased volumes of existing products, gains from new launches across multiple countries and favorable foreign exchange. QoQ performance remained stable as the gains from new product launches and favourable prices was largely offset by softer volume growth.
Revenues from Russia at Rs.7.1 billion, YoY growth of 28% and QoQ growth of 8%. YoY growth was due to higher volumes of existing products, new product introductions and favorable forex. QoQ gains reflect favourable forex, improved pricing and higher sales volumes.
Revenues from other Commonwealth of Independent States (CIS) countries and Romania at ₹2.0 billion, YoY growth of 2% and QoQ decline of 20%. While YoY growth was supported by new product launches, whereas QoQ decline was due to lower volumes.
Revenues from Rest of World (RoW) territories at Rs.5.0 billion, growth of 13% YoY and flat QoQ. While YoY growth was due to higher sales volumes and new product launches, though partially moderated by price erosion, QoQ performance remained steady, as volume gains from existing products and recent launches were neutralized by price erosion.
During Q1FY26, 26 new products were launched across countries.
Pharmaceutical Services and Active Ingredients (PSAI)
Q1FY26 revenues at Rs.8.2 billion, YoY growth of 7% and QoQ decline of 14%.
Growth during the quarter was driven by launch of new API products and favourable forex, partially offset by lower pricing and softer demand. Performance was further supported by growth in the pharmaceutical services business. QoQ decline was primarily attributable to seasonal volume softness.
The YoY increase was driven by strategic investments in consumer healthcare business segment, including the NRT and Nestlé JV. Other SG&A expenses stayed mostly unchanged from last year, reflecting cost discipline across core operations. The QoQ reflects targeted investments to enhance brand visibility and expand coverage across branded markets.
Research & Development (R&D) Expenses
Q1FY26 at Rs.6.2 billion. As % to Revenues – Q1FY26: 7.3% | Q1FY25: 8.1% | Q4FY25: 8.5%.
R&D investments were focused on building a robust pipeline of high-value products, spanning complex generics, biosimilars, APIs and novel biologics with particular emphasis on oncology, peptides and injectables and aimed at developing first to market formulations. Fiinews.com
