Shares of Dr Reddy’s Laboratories Ltd surged 4% on 5 June after the company announced a collaboration with Iceland’s Alvotech to develop a cancer therapy medicine.

Alvotech and Dr Reddy’s will work together to co-develop a biosimilar candidate to Keytruda (pembrolizumab) for worldwide markets, according to an exchange filing. Merck Sharp & Dohme Corp. manufactures and markets Keytruda.

According to the terms of the agreement, Alvotech and Dr. Reddy’s will jointly develop and manufacture the biosimilar candidate, as well as share costs and duties. Subject to certain exceptions, each party will have the right to commercialise the goods worldwide.

This medicine is used to treat many types of cancer, and in 2024, the drug’s worldwide sales were $29.5 billion.

Pembrolizumab is both a monoclonal antibody and an immune checkpoint inhibitor. It is approved to treat a variety of malignancies, including lung cancer, melanoma, and Hodgkin’s lymphoma.

This development comes just days after the company was given a setback when the Delhi High Court barred the companies from distributing semaglutide, or Ozempic (as marketed by Novo Nordisk), in the domestic market following a patent infringement complaint filed by Novo Nordisk.

Dr. Reddy’s Semaglutide sales are expected to be $280 million in fiscal year 2027, according to HSBC, with the possibility of reaching $500 million in the best-case scenario.

At 11:34 am, the shares of Dr Reddy’s Lab were trading 2.86% higher at Rs 1,287.80 on NSE. 

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