Weight-loss drug patents will expire next year, and Indian raw material manufacturers are rushing into the $940 billion market.

Indian companies producing active pharmaceutical ingredients (APIs) are actively preparing plans to supply key raw materials for the production of generic versions of Novo Nordisk A/S Sponsored ADR Class B (NVO.US) weight loss drugs. These weight loss drugs are set to lose patent protection in multiple major markets next year. From Indian pharmaceutical giants like Dr. Reddys Laboratories Ltd. to companies like Macleods Pharmaceuticals Ltd., Indian suppliers are gearing up to produce APIs for the manufacturing of semaglutide generics. Drugs mainly containing semaglutide as the active ingredient are sold under the brand names "Wegovy" and "Ozempic" by Novo Nordisk A/S Sponsored ADR Class B. APIs, also known as active pharmaceutical ingredients, are the core raw materials used in the production of finished drug formulations for patients. As the world's largest non-patent drug supplier, Indian pharmaceutical companies are targeting this potential market opportunity: with the patent for Novo Nordisk A/S Sponsored ADR Class B's "blockbuster" therapy (referring to a high-selling drug) set to expire in multiple countries including Brazil, Canada, India, and China by 2026, the global market in this area could reach a scale of $94 billion by 2035. An analyst team led by Saion Mukherjee of Nomura Securities pointed out in a report on July 15 that Dr. Reddy's Laboratories has invested in building a production facility capable of producing 550 kilograms (about 1212.5 pounds) of peptide drugs annually. Granules India Ltd., headquartered in Hyderabad, has established a subsidiary - Ascelis Peptides - in the second quarter of this year to expand the production scale of various drug raw materials including semaglutide. Vasu Jindal operates a raw material drug production company in Surat and has started supplying semaglutide to larger Indian generic drug manufacturers for research and product development. Although Jindal's company is expected to only sell 10 kilograms of this raw material drug by the end of this year, he predicts that the annual demand will soar to a peak of 240 kilograms starting next year. This data also suggests that even smaller suppliers anticipate a significant increase in demand for this raw material. However, Indian raw material drug manufacturers will face fierce price competition from Chinese companies. Currently, Chinese companies control about 80% of the global supply chain for generic drug raw materials. Some Indian raw material drug manufacturers even rely on importing chemicals from China as raw materials in their production processes, revealing a key weakness in the Indian industry. However, early preparation may be the key to success, especially considering that semaglutide is a structurally complex biological molecule, making its replication relatively difficult. HRV Global Life Sciences Pvt., headquartered in Hyderabad, is also including these types of drugs in its research and development pipeline. Hari Kiran Chereddi, Managing Director of the company, stated that the challenge faced by the industry ecosystem is "how to obtain stable, high-quality starting materials and achieve scalable purification processes." He further explained, "It is for this reason that you will see raw material drug companies quietly preparing well in advance before the patents expire."