Expansion On Cards For Drugmaker Cipla In India: Umang Vohra, MD And Global CEO

Indian pharmaceutical giant Cipla is glaring upon expansion plans in the US as well as the Indian market given the high cash flow that the drugmaker is sitting on. The company reported a robust net cash of Rs 5,850 crores in quarter two of the financial year 2023-24 (Q2FY24).  

Cipla also scored top with its revenue and net profit performance in Q2FY24. The company’s net profit jumped by a whopping 43.4 per cent year on year (YoY) to Rs 1,131 crores in the September quarter. The consolidated revenue too saw a 15 per cent jump over the same quarter last year to Rs 6,854 crores. 

In the post-results briefing, Umang Vohra, MD and Global CEO, Cipla said that the company is looking at a mixed plan of greenfield and brownfield projects for expanding in the US and the Indian market. 

“The ones that we are doing in the US are kind of greenfield, we are building up new facilities there while in India it will be a mix of greenfield as well as expansion of new lines within existing facilities. And wherever that expansion happens there will be employment as well,” Vohra said. 

However, he said that the facilities today are very different from ten years back, with facilities requiring significantly less employee footprint due to more automation with the help of technology. “The size of what was required for a manufacturing facility has become lower than it was before so it creates less incremental employment compared to a decade back,” Vohra added.

While speaking to the media on the expansion strategy, Vohra revealed that for the Indian market, the company will keep an eye out for the M&A activity for a few key areas, adding that the company will be mostly investing in its respiratory capabilities across the US and India. The company has outlined a capital expenditure plan of Rs 1,500 crores with around 700-800 crore already invested till the September quarter. 

New Drug Launches Delayed By Six Months 

Cipla is looking at a six-month delayed timeline for its new drug launches from when they were supposed to be launched due to the ongoing regulatory halt by the USFDA of new launches at its Indore and Goa facilities, said Vohra in the press briefing.

He said that the Indore facility not getting a green flag from the US FDA delays the launch pipeline and the company has been working on the remediations since the audit. “We are also trying to move and de-risk the assets to other facilities which is a program that has been going on for the last four to five months. The product launches are delayed by around six months from the time we could launch to the time we will,” he said. 

Vohra added that Advair indicated for asthma and COPD is the one of biggest and most promising launches that has been hit among other drugs, the company is shifting the drug from the Pithampur facility in Indore to its Long Island facility in the US. He said that Cipla is also shifting some inhaler products from its Goa facility to its Boston plant. “And then we have got Abraxane which is being shifted to a partner facility,” he added. Vohra said that most of the new launches will start hitting the market in the second half of next year.

Promising Pipeline For US, India & Newer Therapies

Speaking to BW Healthcare World, Vohra delineated that there will be four to five diabetes peptide drugs that the company will launch over the next two years with other drugs such as Advair, Abraxane and a partnered inhalation asset in the US. 

For India there will be lots of launches in the respiratory space, he said while adding that there will be the first wave of launches wherever patents expire and there will be investments in brand building and extensions. “In South Africa, we have received the highest number of drug approvals, so I believe the new product activity will happen across our key markets,” he concurred. 

On interest in exploring newer therapies, Vohra told BW Healthcare World that the company's growth trajectory follows expiring patents. “The patents expiring around respiratory, oncology and certain peptides for diabetes are the ones we have in our pipeline and beyond that the pipeline of 2026 to 2030 could be a little different and may even include some biosimilars,” he stated.