Company Background - Cipla

Cipla Ltd was incorporated in the year 1935. Today Cipla is one of the largest manufacturer and marketer in bulk drugs and formulations. It has been ranked as first in India by ORG IMS ratings 2005 in terms of retail pharmaceutical sales. All the bulk drug facilities have been approved by the US FDA and the formulation facilities have been approved by the Medicine Control Agency, UK; the Medicine Control Council, South Africa; the Therapeutic Goods Administration, Australia and other international agencies. It has manfacturing facilities at Kurkumbh, Bangalore, Patalganda and Vikroli in Mumbai. The company's products are currently registered in over 150 countries.

Cipla has a very wide product range which includes antibiotics, anti-bacterials, anti-asthmatics, anti-inflammatory anthelminites, anti-cancer and cardiovasculars. In domestic formulation market, antibiotics are the mainstay, which contributes around 50% of the company's revenue. Some of the leading brands are Ciplox (Ciprofloxacin), Novamox (Amoxycilin) and Norflox (Norfloxacin). Cipla also has in its product portfolio Zidovir (zidovudine, anti-AIDS drug). Cipla was one of the first among the Indian pharmaceutical companies to introduce ampicillin and norfloxacin.

The company is constantly maintained its lead in introducing new drug formulation. The company has very strong research and developement facilities which has been bearing fruits. Its ability to quickly duplicate a new drug introduced elsewhere and introduce it in the Indian market has played a significant role in building a basket of formulation brands. Being one of the earliest entrants into the market with a new drug, generally, enables a company achieve higher realisations. In addition to being among the early entrants, one aspect which has given an edge to Cipla's strategy is the ability to market products at a significantly lower price.

Cipla has developed the world's first budesonide-based, chlorofluorocarbons (CFC) - free anti-asthma inhaler, 'Budecort CFC-free'. Budesonide, which falls in the preventive class of anti-asthmatic drugs, is essentially a steroid and preferred due to its safety profile. The company has invested over Rs 20 cr in developing CFC-free asthma products over a period of 12 month. The product is largely being targeted at the international markets, which are CFC-sensitive and is awaiting for registration in the European markets. The fruits of the new product will be obtained in the coming years, since the company expects to increase its exports through this product.

In Dec 2000, the company cut the price of its anti-AIDS drug Nevimune (scientific name : nevirapine) by 34% to Rs 650 for a strip of ten tablets. The price was earlier Rs 985. Cipla has slashed the price of the drug thrice reducing it from the launch price of Rs 1,350 for a strip of ten to the current price. The company attributes this to improvements in technology that has enabled it to cut costs and pass on the savings to consumers.

Cipla is the only manufacturer of nevirapine from the basic stage in India. This is the fourth price cut of anti-AIDS drugs effected by Cipla in the last three years. The last reduction was in Sep 2000 when prices of its Lamivir, Duovir, Stavir and Nevimune brands were cut between 13 - 45% across six dosage forms.

Among the large pharma companies, Cipla was considered as the fastest growing company with a pre-eminent position in anti-asthma and its foray into high-growth areas like anti-cancer and anti-AIDS. However, current performance is not in line with this perception.

Cipla became the first player outside the US and Europe to launch non-CFC (chlorofluorocarbons) metered dose inhalers. After growing smartly in the domestic market, the company is now focussing on export markets. Cipla has tied up with US major Andrx to supply Omeprazole, an anti-ulcer bulk drug slated to go off patent in October. Andrx is expected to gain the 180 days exclusivity for marketing the generic Omeprazole in the US market, post-patent expiry in October 2001.

Cipla has also tied up with the US-based Zenith Goldline and United Research Labs for marketing Flutamide (an oncology drug) and Felodipine (a cardiovascular drug) in the US and European markets. Flutamide will go off patent in May, while the patent for Felodipine will expire in late 2001.

Cipla has one of the best R&D facilities for reverse engineering in the country. As in the past, its R&D division continues with its focus on finding new processes for existing products.

Cipla is now focussing on high-margin areas like anti-AIDS, cardiovascular and anti-cancer, in order to reduce its exposure to the highly competitive anti-infectives segment. In July 2001, the company has effected another round of price cuts of its anti-AIDS drug segment. This is the fourth price cut in AIDS segment during the last nine months (last one was in May 2001). The company has cut prices of its triple drug regimen by as much as 39%. The three-drug combination of lamivudine, stavudine and nevirapine, which has the potential to reduce the HIV virus in the body to very low levels, will now cost the patient Rs 2,130 per month down from Rs 3,495 per month.

The company is one of the three Indian pharma companies who will jointly market the anti-anthrax drug, Ciprofloxacin, in India. The company is also to benefit in case if USA allows the Indian companies to sell their anti-anthrax dose over there . Anthrax has gripped the world, mainly the USA recently and is suspected to be a form of biological terrorist attack. During 2001-02 a number of Active Pharmaceutical Ingredients which was made in house was introduced, This will definitely scale up the overall sales growth in the near future.

During 2004-05 the company launched many new products and APIs in the country. Some of them are Duova, Duovir E Kit, Duonase, Levolin, Mucinac, Seroflo Multi-Haler and Voltanec. The first phase of the new formulation plant at Baddi, Himachal Pradesh for the manufacture of tablets and capsules was completed and the unit commenced commercial production in April 2005.

In 2005-06 the company has enhanced its installed capacity of Bulk Drugs (including Malts), Tablets & Capsules, Creams, Aerosols/Inhalation Devices and Injections/Sterile Solutions by 79 Tonnes, 2828 Millions Nos, 400 Tonnes, 7800 Thousand Nos and 461 Kilolitre respectively. With this expansion the total installed capacity of Bulk Drugs (including Malts), Tablets & Capsules, Creams, Aerosols/Inhalation Devices and Injections/Sterile Solutions by 1598 Tonnes, 12296 Millions Nos, 616 Tonnes, 53580 Thousand Nos and 1071 Kilolitre respectively.

The company's new export-oriented manufacturing unit for APIs and drug formulations is nearing completion at Patalganga. It is expected to commence production in the second quarter of 2006-07. The company expanded its facilities at Baddi in Himachal Pradesh. The company is planning to set up a large drug formulation manufacturing facility for various dosage forms as a Special Economic Zone (SEZ) in Goa and also planned major additions to its manufacturing facilities at Kurkumbh and Bangalore.