20 Dec , 2021 By : monika singh
NEW DELHI: Shares of Cipla NSE 2.36 % rose 3 per cent in early trade on Monday after the drug major said it has received approval from the US health regulator to market injections of Lanreotide, used for the treatment of acromegaly and gastroenteropancreatic neuroendocrine tumours, in the American market.
The scrip rose to a high of Rs 884.80 as against Rs 860.20 at previous close on the National Stock Exchange.
"This approval is a significant step for our US business and is in line with our aspiration to continue growth in our complex product pipeline and address unmet patient needs,” reports quoted Cipla MD and Global CEO Umang Vohra as saying.
The company's product is the generic equivalent of Ipsen Biopharmaceuticals Inc's Somatuline Depot.
According to the firm IQVIA, Somatuline Depot had US sales of around USD 867 million for the 12-month period ended October 2021.
Foreign firm Nomura lauded the development and said that it had not been accounted for in the earnings estimates of Cipla.
“Cipla on 18 Dec 2021 announced final USFDA approval of Lanreotide depot injection... We expect the product to be launched soon. The approval is a positive surprise and is not factored explicitly into our earnings estimates," the global brokerage said.
“CIPLA’s market share gain can be aided by the fact that the product is administered in clinics (not self-administered) and it is a growing market, Further, being an early-mover CIPLA is likely to gain a healthy market share over the next 12 months.”
Assuming price erosion of 30-50 per cent and 10-20 per cent market share, the annual sales for CIPLA could be $50-75 million, in Nomura’s view.
The firm said that assuming a gross margin of 60-65 per cent, the net earnings contribution from the development could be in the range of $25-35 million, translating into earnings per share of Rs 2.4-3.1. “This is ~6-8% of our FY23F EPS estimate of INR39.7,” Nomura added.
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