Cipla expects Q2 growth momentum to continue on back of India business, albuterol sales in US

Pharmaceutical major Cipla has said it expects to sustain sales momentum of Q2FY21, on the back of resilience in India business backed by COVID products and continuous growth in US sales on account of Albuterol market share gains.

Cipla on November 6 reported strong numbers with revenue rising 15 percent year on year to Rs 5,038 crore and net profit rising 41 percent to Rs 665 crore. The EBITDA stood at Rs 1,177 crore or 23.4 percent of revenue, rising by 266 basis points.

Cipla attributed this growth to robust performance across geographies, including in its key markets -- India, the US and South Africa.

India business grew 17 percent YoY to Rs 2,090 crore, well above the market growth of mid-single digits led by COVID portfolio, traction in chronic therapies, and a recovering hospital business partially offset by subdued seasonal triggers in acute therapies.

The firm's prescription business in India grew 14 percent YoY, as COVID-related products contributed about Rs 250 crore in Q2FY21.

Along with antiviral products for COVID such as Remdesivir, Favipiravir and Tocilizumab, Cipla's large basket of products that also have applications in the treatment of COVID have helped the company deliver market-beating performance. Its new products in the consumer space such as masks and sanitisers also boosted its bottomline.

Cipla MD and Global CEO Umang Vohra said at the company's earnings call on Friday that he expects the COVID sales to be at 30-35 percent of current sales level, despite the downward trend of COVID-19 cases in India.

"The more we understand now, there will be patterns of cases going up and down. It will be endemic," Vohra said. The US business saw continued traction with launches such as Albuterol, Esomeprazole oral suspension and Migranal DHE. The company had launched dimethyl fumarate DR capsules in Q2FY20.

Cipla's US sales grew 5 percent YoY to $141 million in Q2FY21.

Vohra said while there is a huge competition in Albuterol meter dose inhaler (MDI), with seven competitors, it still remains a big opportunity.

"It is a 65 million units market, it's a big market," Vohra said. Albuterol is used in the treatment of asthma and chronic obstructive pulmonary disease. The company has the capacity to gain 20-25 percent of the market share, he added.

"We don't want to build it overnight, sustainability of supplies is more important. We do it in a quarter or two quarters," Vohra pointed out.

Cipla has got approval for Albuterol in the US market in March. The withdrawal of Dublin-based Perrigo from the US market due to issues with its devices created a temporary shortage of 7-8 million units of the drug. The loss of one competitor has led to more pricing stability.