Dr Reddy's Laboratories has terminated its distribution and promotion agreement with Novartis India Ltd (NIL) for select brands in India, as reported by CNBC TV18. The agreement, originally signed on February 11, 2022, has been ended following a change in the controlling shareholding of Novartis India. The termination relates specifically to the distribution and promotion of select brands in the domestic market.
Under the agreement, Dr Reddy's had been granted the exclusive and non-transferable right to promote, distribute and sell certain products specified in the agreement. Following the termination, Novartis India will re-acquire exclusivity and secure market access for the products for which Dr Reddy's had been granted exclusive rights to promote, distribute and sell, according to the company's exchange filing. This ensures continuity of market access for the affected product portfolio.
Despite the termination, Dr Reddy's clarified that it will continue to commercialise the brands covered under the agreement until September 30, 2026, according to the company's stock exchange filing. This transition period provides time for both companies to manage the transition of these pharmaceutical brands in the Indian market.
Shares of Dr Reddy's Laboratories ended 0.09% higher at ₹1,172 on the NSE on Friday, as reported by CNBC TV18. The modest stock movement suggests market participants viewed the termination as a business decision rather than a significant operational disruption. No financial impact or additional details regarding the termination were disclosed in the company's filing.
The company did not specify which brands are covered under the agreement or provide further information on the change in the controlling shareholding of Novartis India, as reported by CNBC TV18. No financial impact or additional details regarding the termination were disclosed in the filing, indicating this is primarily a contractual matter rather than a financial restructuring. Novartis India operates across therapeutic areas including pain management, calcium supplementation, gynaecology, neurosciences and transplant immunology, with brands such as Voveran, Calcium Sandoz and Tegrital, among others.
