Geopolitical challenges across the world cast a shadow of uncertainty: Cipla CEO  

PT Jyothi Datta | Updated on: May 11, 2022
Umang Vohra, MD and Global CEO of Cipla

Umang Vohra, MD and Global CEO of Cipla | Photo Credit: Kesavan A N@Chennai

Focus on getting plants audited to ensure product launches go as planned 

With Covid-19 becoming more “manageable” and expected to come in waves, drug-maker Cipla sees uncertainty now coming from geopolitical challenges in different parts of the world.

“I see a lot of uncertainty on account of the procurement freight costs for over the next 3-4 months,” Umang Vohra, MD and Global CEO of Cipla, told BusinessLine. “Geopolitically, how this impacts every market is a challenge, and I think we have to offset that with a huge amount of execution on our side to make sure launches go on,” he said, referring to strife in different parts of the world, from Sri Lanka to Russia’s war on Ukraine.

The company had, for instance, taken a ₹40-crore impact, as its subsidiary in Sri Lanka could not repatriate the money, he said. Vohra was speaking to select media on the company’s financial performance and the road ahead.

What lies ahead?

Cipla has a sizeable portfolio of drugs to treat Covid-19, from the early anti-virals like Remdesivir to Paxlovid, the most recent one from Pfizer. It’s kitty also includes Roche’s Tocilizumab, besides its anti-body cocktail therapy, the latter, however, seeing a slower off-take in the country.

The company’s India revenues did see a robust growth, including revenues from its Covid portfolio. However, the last quarter ended March 31, 2022, also saw the company take a ₹200-crore impact from, among other things, demand variability in forecasts largely due to Covid, he said. On the inventory that remains with the company, Vohra said, he was confident it would get “liquidated”.

Cipla was also said to be helping Moderna with regulatory issues to bring its mRNA vaccine into India. In fact, the vaccine had even received an emergency use authorisation. However, Vohra, said, that did not seem to move ahead as the environment in India had since changed. “We’re happy to help with it, but I‘m not sure that this is a priority for either them, at this point in time, or for us,” he said.

Outlining priorities in the year ahead, Vohra said it would include ensuring the pipeline of product launches in the US, India and South Africa; and being prepared to get its plants audited by the US Food and Drug Administration.

Financial performance

The company posted revenues of ₹5,260 crore for Q4 FY22, up 14 per cent over the same quarter in the previous year. It also saw a 12 per cent dip in its profit after tax at ₹362 crore compared to Q3.

For FY22, the company’s revenues stood at ₹21,763 crore (up 14 per cent), and profit after tax at ₹2,517 crore (up 4.7 per cent). Cipla’s India business saw several milestones this quarter, Vohra said, including crossing the $1-billion milestone in the domestic branded prescription business driven by the sustained growth across acute and chronic portfolio.

The company would scout for branded products in India and South Africa, he said, to bolster growth.

Published on May 11, 2022
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