"Only after examination by the medical experts, we can know the name of the chemical which leaked," police said adding further details were awaited.
In a statement, Dr Reddy's Laboratories said an employee of the company and a contract staff had died in the accident.
"The authorities are currently investigating the unfortunate deaths of an employee and a contract staff working at our manufacturing facility in Bollaram, Hyderabad," it said.
"No other persons were injured. We will advise on further details once the investigations are complete," the company's statement added.
The firm's Bollaram manufacturing facility produces active pharmaceutical ingredients (API).
Police said the victims at the company's facility that is located in Medak district of Andhra Pradesh were on night duty.
There was a chemical leakage from a unit at Bollaram village of Dr Reddy's Laboratories which resulted in two deaths and two falling ill, it said.
Reacting to the news, shares of Dr Reddy's tanked 4.13 per cent to a month-low of Rs 1,618 per piece on the Bombay Stock Exchange in early morning trade.
The scrip saw a similar fall on the National Stock Exchange, and quoted at Rs 1,616.10, down 4.18 per cent in the morning session.
Hyderabad: Two workers of the drug firm Dr Reddy's Laboratories lost their lives and two others fell unconscious in an accidental gas leak on Wednesday morning at its manufacturing plant at Bollaram on the outskirts of Hyderabad.
First Published: Wednesday, December 22, 2010, 13:53