Cipla Top Pharmaceutical Company India

CIPLA

Summary

• Cipla leads the Indian pharmaceutical industry with a market share of 5.3%, representing $411m in sales in 2008.
• Cipla is moving away from its low risk partnership model by directly filing ANDAs in the US generics market to mitigate the risks arising from consolidations.
• Cipla’s low risk partnership model allows quick and easy entry in new markets while limiting the risk of setting up and litigation related to regulatory compliance.
• It lacks direct marketing experience in international markets due to the limitation of its low-risk business model.

Table 8: Cipla snapshot
Headquartered:	Mumbai, India
Established:	1935
Revenue (2008):	$411m
Employees (2008):	N.A.
Market share (2008):	5.3%
Major therapeutic focus:	Respiratory system and anti-infectives
N.A. - Not available.

Source: Company information/ IMS Health

Company overview

Cipla supplies generic formulations and intermediates in the Indian as well as international markets. It also manufactures animal health products, flavors and fragrances and agrochemicals. Its products are registered in approximately 140 countries and purchased in over 180 countries. It owns seven manufacturing facilities in India approved by various international regulatory agencies including the US FDA and the Medicines and Healthcare products Regulatory Agency (MHRA) in the UK. Apart from formulations and APIs, it also generates revenues by providing technological services to its partners.

Marketed products

The top 10 marketed products of Cipla based on 2008 sales are listed in Table 9.

Table 9: Cipla top 10 marketed products sales ($m), 2007–08
Drug name	Therapeutic area	2007	2008	Growth rate 2007–08 (%)
Asthalin	Respiratory	21	21	-1.9
Seroflo	Respiratory	17	19	6.2
Novamox	Anti-infectives	16	16	-2.5
Ciplox	Anti-infectives	15	15	1.0
MT Pill	Genito-urinary system	10	13	35
Aerocort	Respiratory	13	13	-2.6
Foracort	Respiratory	10	11	9.6
Norflox	Anti-infectives	9	9	-2.8
Amlopres-AT	CVS	8	8	7.3
Duolin	Respiratory	7	8	11.0
Total		127	133	4.4
Others		255	278	8.9
Grand total		382	411	7.4

Source: IMS Health, copyright, reprinted with permission

During 2007–08, Cipla launched several new products along with new drug delivery systems such as an oral emergency contraceptive pill ‘i-pill’ in the OTC segment. Some of the products launched in 2007–08 are listed Table 10.

Table 10: Cipla new product launches, 2007–08
Product	Indication
Adlube	Dry eye
Alfusin-D	Prostate enlargement
Assurans	Pulmonary hypertension
Ciclospray	Allergic rhinitis
Enclex	Deep vein thrombosis
Fullform	Asthma
Imicrit	Serious bacterial infections
Riomont	Obesity
Ritomune	HIV/AIDS
Ston 1	Kidney stones

Source: Company information

Therapeutic focus

Cipla’s major therapeutic areas based on 2008 revenues are respiratory system (accounting for 30.9% of the total revenues in 2008) and anti-infectives for systemic use (24.9%) as shown in Figure

Research and development

Cipla is developing new formulations for existing and new drug substances. It is also actively participating in the development of agro technology, genetics and biotechnology for cultivation of medicinal plants and isolation of active ingredients from plant materials. Additionally, it is also involved in the development of new drug delivery systems for existing and new active drug substances as well as new medical devices.

Growth strategies

Expanding in international markets through alliances and partnerships

Cipla has adopted a low risk business model to expand presence in international markets. It primarily concentrates on development and manufacturing of APIs and formulations and depends on partners in international markets for commercialization and regulatory filings. This helps it attain quick access in new markets with limited risk of setting up and regulatory litigation. Cipla has signed several long term contracts with pharmaceutical companies such as Hexal, Ratiopharm, Stada, Watson, Barr, Mylan, Akorn and others for marketing its products in target international markets. In the US market alone Cipla has partnerships with nine companies for over 125 products. However, this model limits the upside potential for Cipla as it reduces margins due to profit sharing.

Expanding capabilities

Cipla is expanding its manufacturing capabilities in high-margin formulations and inhalers. This will allow it access to additional contract manufacturing opportunities in high-margin formulations and strengthen its presence in the inhalers market in the US and Europe. It announced plans to invest $240m (INR9,500m) during 2007–09 to construct three manufacturing facilities in special economic zones (SEZs) in India to achieve tax benefits. As a part of this plan, the company spent about $44m (INR1,800m) on a new tablet and injectibles manufacturing plant in Sikkim which became operational in April 2008, the remainder was invested on manufacturing plants in Indore and Goa. Aside from improving Cipla’s margins in the long term these investments will help it capitalize on the growth potential of inhalers in the developed markets of Europe and the US.

Growing in the US generics market

Cipla is transcending from its low risk partnership model in the US to mitigate the risks arising from consolidations in the markets. It is building its own product pipeline by filing ANDAs in the US market. It received approval for approximately eight ANDAs in separate therapeutic areas during 2007–1H09. In 2009, the FDA granted tentative approval under US Government’s President’s Emergency Plan for AIDS Relief (PEPFAR) for Tenofovir disoproxil fumarate tablets, a generic version of Gilead’s Truvada used for the treatment of HIV-1 infection in adults. Other ANDA filings approved in the US during 2007–09 are listed in Table 11.

Table 11: Approved ANDAs of Cipla in the US, 2007–09
Global brand	Generic	Indication	Approval date
Truvada	Tenofovir	HIV/AIDS	May-09
Aredia	Pamidronate	Bone metastases	Dec-08
Altace	Ramipril	Hypertension and congestive heart failure	Aug-08
Sonata	Zalepon	Insomnia	un-08
Retrovir	Zidovudine	HIV/AIDS	Jun-08
Kytril	Granisetron HCL	Chemotherapy induced nausea and vomiting	Mar-08
Mavik	Trandolapril	Hypertension	Jun-07

Source: Company information/ author’s research

Acquisitions and divestments

Cipla has adopted a low risk business model unlike its peers such as Ranbaxy and Sun Pharma that have pursued aggressive acquisitions and patent challenges. It has primarily focused on growth through enhanced partnerships, expanded facilities and improved product mix. However, Cipla does not rule out the possibility of acquisition driven growth. It plans to acquire companies which will augment its product portfolio or bring in a new technology. 

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