Cipla: Omeprazole uncertainty intensifies - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Cipla: Omeprazole uncertainty intensifies

Oct 5, 2001

The uncertainty prevailing over the export of Omeprazole by Cipla to Andrx has further intensified. Omeprazole, which is the largest selling pharma product in both US and the World export, is considered to be a key earning opportunity for the company. Cipla has an arrangement to supply Omeprazole (bulk drug) to Andrx. Andrx in turn claims to have a six-month marketing exclusivity for the drug. However, the issue is caught in a long legal tangle. Recently, the US FDA had granted two more patents to AAI Pharma, which is working together with AstraZeneca (the original patent holder of the drug). Yesterday, the US FDA for the first time indicated to Andrx (and all other ANDA applicants) that the final marketing approval for generic version of Prilosec (Omeprazole) might be delayed. The US FDA is currently addressing issues raised by AstraZeneca relating to patents granted to AAI Pharma.

This announcement by US FDA would further intensify the ongoing legal battle and consequently, further delay the launch of the generic drug. The eventual launch of the drug is now contingent on the successful resolution of the patent litigation and FDA approval. The markets would be closely watching developments on the Omeprazole front in the coming months.

While Cipla has an agreement with Andrx to supply bulk omeprazole, Dr. Reddy’s has also filed an ANDA to market generic Omeprazole in the US and is expecting to receive a first to file status for the 40-mg version. Due to uncertainty, we had not incorporated any earnings upside from Omeprazole in both the companies and thus we maintain our projections.

Current Valuations
Particulars CMP Mkt.Cap P/E (x) EV/EBITDA (x)
  (Rs.) (In Mn.) 2002E 2003E 2002E 2003E
Cipla 1045 62669 24 19 20 17
Dr.Reddy's 1768 55957 21 16 16 15

Equitymaster requests your view! Post a comment on "Cipla: Omeprazole uncertainty intensifies". Click here!

  

More Views on News

Cipla's New Covid-19 Drug to Be Sold at Rs 59,750 Per Dose (Views On News)

May 25, 2021

The first batch of Roche's antibody cocktail has been launched in India, with the second batch to be made available by mid-June.

Cipla's Q4 Update: Net Profit Surges 68%; Company to Pay Rs 5 Dividend (Views On News)

May 17, 2021

Here's a rundown on the latest quarterly results of Cipla.

CIPLA Announces Quarterly Results (3QFY21); Net Profit Up 112.8% (Quarterly Result Update)

Feb 1, 2021 | Updated on Feb 1, 2021

For the quarter ended December 2020, CIPLA has posted a net profit of Rs 8 bn (up 112.8% YoY). Sales on the other hand came in at Rs 52 bn (up 18.2% YoY). Read on for a complete analysis of CIPLA's quarterly results.

What's Behind the Rally in Pharma Stocks? (Views On News)

May 11, 2021

The second wave of Covid has given a new lease of life to pharma stocks.

Points to Keep in Mind Before Subscribing to Krishna Institute of Medical Sciences' IPO (Views On News)

Jun 15, 2021

All you need to know about the IPO of Krishna Institute of Medical Sciences.

More Views on News

Most Popular

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

My 'Unlock' Investments (Fast Profits Daily)

Jun 11, 2021

The best unlock investments you can make in the market.

How I Discovered a 400-Year-Old Open Secret to Extreme Wealth (Profit Hunter)

Jun 11, 2021

Charlie Munger's open secret about investing success.

The Most Visible Sign of India's Revival is on Two Wheels (Profit Hunter)

Jun 9, 2021

Investing in the best stocks could result in wealth compounding on a massive scale.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

CIPLA SHARE PRICE


Jun 18, 2021 (Close)

TRACK CIPLA

COMPARE CIPLA WITH

MARKET STATS