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Informist, Friday, Jul. 25, 2025

By Anand JC and Narayana Krishna

NEW DELHI/HYDERABAD - Indian pharmaceutical major Cipla Ltd. Friday said it does not expect any potential tariffs on imports of drugs into the US to have a 'debilitating' impact on manufacturers of generic drugs. "We do think that there will be an impact, right? But it's not a debilitating effect that will derail the way that we've thought of our business," Cipla's Managing Director and Global Chief Executive Officer Umang Vohra told reporters in a virtual post-earnings press conference.

US President Donald Trump has threatned the imposition of a potential 200% tariff on pharmaceutical products in July, part of the administration's broader reciprocal trade framework. For Indian companies, the US is the largest pharmaceutical export market. The company generated sales of INR 19.3 billion from North America in the June quarter, around 28% of its overall sales.

"From a tariff perspective, I don't think the print as yet is clear," Vohra said. "Our general sense is that pharmaceuticals is fairly essential to everyone's life. And therefore, even if it's tariffed, it's probably not going to be tariffed at the rate that the rest of the markets, you know, the rest of the products would be," he added. 

New product launches in the respiratory segment offer Cipla the biggest opportunities in the next 12-18 months, Vohra said. The company will launch 3-4 products in this category in the US alone, along with some more in India and emerging markets. "Just being able to execute those is actually our biggest opportunity," Vohra said. 

The company's respiratory therapies grew 6% during the June quarter, the lowest among its other therapies. The company expects it to recover in the coming quarters.

The company plans to file for diabetes and obesity drug Semaglutide in other markets outside India and may also explore doing so through partners. "So we're going to be perhaps making two filings in some of the markets that are of importance across the world. I think the India market is potentially important to us where we're looking at the whole GLP-1 category and not just Sema alone," Vohra said.

GLP-1 or glucagon-like peptide-1 has gained traction in the pharmaceutical industry in recent years. It is being used to regulate bood sugar levels and appetite, a by-product result of which has also been weight loss in patients. The company is working on a strategy to see how it would make the most economic sense for it, Vohra said. 

"We do think it will be competitive but our overall thinking in this category is this is going to be pretty definitive in terms of a new therapy, in terms of a new section of the market and an opportunity that will be probably the biggest that we've seen in the last five years," he said. Given that the GLP-1 category is "exploding", Vohra said the company will be open to partner with others wherever there is patented technology.

The company said it is cautious on its cash reserve utilisation. "...because we have it (cash), we shouldn't become, you know, we shouldn't become trigger happy and get everything that's available out there," Vohra said in response to a query on if the company is planning any acquisitions. The company's cash reserves as of Jun 30 stood at INR 108.38 billion.

"It has to be strategic and it has to serve a purpose....we just don't merely want to buy another brand that's available in the market, but a brand that's differentiated and a brand that probably does something for patients that others don't, that other products in the category don't," Vohra said.

Cipla reported an earnings before interest, taxes, depreciation, and amoritsation margin of 25.6% for the June quarter. The company reiterated its guidance of 23.5-24.5% EBITDA margin on a four-year basis. 

The company expects its India market to grow in the 8-10% range on a full-year basis. "So I think we started a little slow, hoping to see the season quarters, you know, going relatively well. And I think we continue to see that, you know, we continue to remain very optimistic in India," Vohra said.

The company reported a consolidated net profit of INR 12.9 billion for the June quarter on revenues of INR 69.6 billion. On Friday, its shares closed 3% higher on the National Stock Exchange at INR 1,532.50 per share.  End

Edited by Vandana Hingorani

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