Jan 23 (Reuters) – Cipla, India’s third-largest drugmaker by revenue, reported a steeper-than-expected 57% fall in quarterly profit on Friday, dragged down by a production halt at one of its exclusive manufacturers as well as acquisition costs.
The drugmaker’s stock fell 4% after the results and was the top loser on the pharma index, which is down nearly 1%.
Greece-based Pharmathen, Cipla’s exclusive contract manufacturer for its key tumour therapy Lanreotide, temporarily paused production in the reporting quarter to work through U.S. FDA remediation requirements.
The company, which makes the popular Asthalin inhaler and the Cofsils cough drops, said it expects the supply of Lanreotide to start in the first half of fiscal 2027.
Moreover, Cipla paid 11 billion rupees to Swiss-based drugmaker Novartis in the reporting quarter to acquire rights to manufacture and market some of its diabetes drugs. It also acquired Inzpera Heathscience Limited for 1.1 billion rupees, it said, gaining access to its paediatric pharmaceutical products.
Cipla’s consolidated net profit fell to 6.76 billion rupees ($73.8 million) for the quarter ended December 31 from 15.71 billion rupees a year earlier.
Analysts, on average, had expected the profit to fall to 12.42 billion rupees, as per data compiled by LSEG.
Expenses rose 14% to 61.12 billion rupees.
The drugmaker has also been navigating pricing pressure for its generic version of Bristol-Myers Squibb’s cancer drug Revlimid. The product has been a significant U.S. revenue driver in recent years but is set to face broader generic competition as earlier patent settlements allow drugmakers to begin unrestricted sales at end of the month.
Revenue from Cipla’s North America business fell 22% to 14.85 billion rupees. This hurt its overall revenue, which was flat on-year at 70.75 billion rupees, below analysts’ expectations of 74.76 billion rupees.
However, revenue from India, the company’s largest market, increased 10% to 34.57 billion rupees.
India and North America contribute roughly three-fourths of Cipla’s revenue.
($1 = 91.6200 Indian rupees)
(Reporting by Kashish Tandon in Bengaluru and Rishika Sadam in Hyderabad; Editing by Janane Venkatraman)
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