Sun Pharma, Lupin, Cipla among top bets as weight loss drug Semaglutide patent nears expiry

Stock picks in the pharmaceutical and healthcare space could see a major tailwind in 2026 as blockbuster weight-loss drug Semaglutide goes off patent in key markets, according to Alankar Garude, Analyst at Kotak Institutional Equities. Garude named Sun Pharmaceutical Industries as his top pick in large-cap pharmaceuticals, followed by Lupin and Cipla, while favouring Apollo Hospitals Enterprise in the hospital segment.

The investment case, Garude said, is anchored in the expiry of Semaglutide’s patent in India and Canada in 2026, a development that could reshape the weight-loss and diabetes drug market and unlock a multi-billion-dollar opportunity for generic drug makers.

The loss of exclusivity is expected to drive sharp volume expansion, intense competition in the early years, and eventual consolidation around companies with strong execution and doctor reach—areas where Indian pharma players are well positioned.

In Canada, where the Semaglutide patent has already expired, no generic version has yet been approved. Garude identified Dr Reddy's Laboratories, Sandoz, and Apotex as the leading contenders. Dr Reddy’s, which received a notice of non-objection in late October, is now expected to receive approval around May 2026, while Apotex is on a similar May–June timeline. Sandoz, earlier seen as a potential first mover, has pushed its launch to the third quarter of 2026. “This is actually not bad news for Dr Reddy's,” Garude said, stating that delayed launches could reduce early competitive intensity.

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Garude estimates the Canadian Semaglutide market at over $1 billion, with more than one million patients currently on the branded drug. He expects a sharp rise in usage once generics enter. “This number could expand by 50%, 100%, even more than that… from 1 million, we'll have a number closer to two, two and a half million over the next couple of years,” he said.

Pricing, however, will be critical, as Canada follows a structured erosion model, with prices falling 25% after the first generic, 50% after the second, and 65% after the third. He also expects the innovator, Novo Nordisk, to “go all out” to defend its market share.

Other players, including Sun Pharma, which filed in June 2025, are likely to enter the market towards the end of 2026. A key uncertainty remains regulatory caution, as Health Canada has yet to approve a single GLP-1 generic.

In India, the Semaglutide patent is set to expire in March 2026, setting the stage for a much more crowded launch environment. Garude expects multiple launches in late March or early April, with at least three companies already having approvals. “For the first couple of years, the competition is going to be pretty intense,” he said. Over time, he expects consolidation, with companies that have strong relationships with diabetologists and endocrinologists emerging as clear winners. “Companies which have a stronger franchise amongst diabetologists as well as endocrinologists… will be the eventual winners. Our view is the top 10 or maybe the top 15 companies will have a 75 to 80% share of the market,” Garude explained.

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Against this backdrop, Garude said investors should focus on scale, execution capability, and brand strength—factors that underpin his preference for Sun Pharma, Lupin and Cipla in pharmaceuticals, and Apollo Hospitals in healthcare services, as demand for chronic and lifestyle-related treatments continues to rise.

For the entire interview, watch the accompanying video

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