Cipla's US Generic Portfolio to face Challenges

In the last 3 years, Cipla's US generics business has grown faster than its peers on a lower base of 10% CAGR, and on the domestic front, Cipla has seen ~16% CAGR growth mainly led by COVID portfolio FY21 & FY22.

However, the US generic business is likely to face delays in critical product approvals and limited niche product opportunities resulting in lower CAGR growth. Ex-COVID India's portfolio is expected to grow in line with pharma market growth.

gAbraxane - Abraxane is a chemotherapy medication used to treat various types of cancers, including ovarian cancer, esophageal cancer, breast cancer, lung cancer, Kaposi's sarcoma, cervical cancer, and pancreatic cancer.

The innovator market size is estimated at ~$700 million with generic competition to enter from March 2022 with Actavis being the sole FTF, the other para 4 filers include Cipla and Apotex, whereas SPARC and HBT labs have 505(b)2 filings which enable manufacturers to apply for approval without having to repeat all the drug development work done for an innovator drug.

Cipla has settled the product for all the patents, and it is expected for Cipla to launch the product only after 180 days of exclusivity of Actavis ends. As per the settlement with Actavis and Celgene, Actavis will be launching the product on 31st March 22. Cipla has filed the product from the Goa plant which currently has a WL issued on Feb'20, will need FDA's clearance for Final Approval.
 

gAdvair - Fluticasone/salmeterol, sold under the brand name Advair is a combination medication containing fluticasone propionate and salmeterol, used as a medication for asthma and chronic obstructive pulmonary disease.

In May'20, Cipla filed for an abbreviated new drug application (ANDA) for Fluticasone propionate and Salmeterol inhalation powder (100/50 mcg, 250/50 mcg, and 500/50 mcg).

Cipla has been struggling to clear the CRL from FDA since the time it filed for the ANDA. The generic entry from Teva, Mylan, Hikma, and Prasco Labs (AG) in the market. Mylan has been very aggressive in gaining market share, Mylan's average unit price is estimated to be between $2.75 & $3.5/Unit.

Cipla may likely take another 18 months to clear the CRL and post which it might get approval, hence, there is a possibility that by 1HFY25 the product will be launched. 

gSomatuline - Molecule Lanreotide is a medication used in the treatment of acromegaly (A disorder in adults in which the pituitary gland produces too much growth hormone) and symptoms caused by neuroendocrine tumors, most notably carcinoid syndrome (slow-growing cancer).

It is a long-acting analogue of somatostatin, like octreotide. Cipla has in-licensed the product from Pharmathen. Pharmathen developed the product for which reference product is Somatuline Autogel solution for injection in a prefilled syringe (PFS) by Ipsen Pharma GmbH.

Since this is an Auto-Injector, Cipla will have to invest efforts in creating a field force for marketing the product, and on the administration of the product.

Volumes are expected to be very low in the first year of launch and Cipla will have to carve out its own niche since the Original product is a Long-acting Injection and not a PFS. Hence, we believe this will remain a low-value opportunity for Cipla.

Cipla's US Revenue & Adjusted Profit After Tax is expected to grow at ~8% & ~10% CAGR over 3 year period (ex-gRevlimid). Cipla has hit peak market share in gAlbuterol and growth from here on seems to be very challenging.