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Cipla will maintain its EBITDA at 22% in FY22, says Kedar Upadhye

Kedar Upadhye, Global Chief Finance Officer, Cipla, talks about March quarter numbers, market share of Albuetrol in the US market, the deal with Eli Lilly for the drug Baricitinib, production of Remedisvir black fungus drug and guidance for FY22 among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts: 

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Q: The company has posted good numbers but the market expected that your numbers will be even better. What would you like to say about the overall numbers? Also, tell us about the challenges that you faced in this quarter?

A: While publishing the results of the December quarter, we gave guidance that our sales for COVID medicine will come down in the fourth quarter (March quarter). Also, in this quarter, our India business – domestic business – also has a reverse type of seasonality, where, the sales for the respiratory and acute products remain good as per the season till December and they come down sequentially in March quarter. So, we talked about the two things and it has happened. At the same time, our global access business had some tender supplies and we had more supplies in the third quarter. So, these two-three things are the factors due to which our profit was high in the third quarter and accordingly was slightly low in the fourth quarter. But I believe that the results we have posted on a full-year basis, in terms of sales, profit and cash and if seen from that aspect then our EBITDA percentage stands above 22%. And historically, you would have seen that usually our EBITDA used to stay between 16% and 19% and we have breached it. The new products that we are launching, whether it is sales of COVID, and the markets that we have across the world, like South Africa, the US, the emerging markets, Europe and Asia, our sales have been good. Even our product mix has also been good in these markets. Due to these factors, our full-year EBITDA percentage stands above 22% and I believe that we will maintain it in the coming years. 

Q: What is the market share of Albuetrol in the US market and how much it increased in this quarter? What will be your strategy for increasing market share in future?

A: Albuetrol has been a good launch experience for us. As you know, we launched it in April last year and it has been around 12-13 months by now and we have done good work in it. We have an 87% share in the market of Proventil brand. If you will have a look at the complete Alburtrol generic, which includes generic and authorized generics combined, we have a 16.5% market share in it. And in the case of complete Albuetrol, which also includes the innovator sales, then our prescription share stands around 14%. Despite, presence of 7-8 players, we have been able to make such a market share, which is quite good and the complete doses of the same in the US stands around 60-65 million, annualized number of doses. So, we also have the headroom to increase our market share in it and we are moving in the same direction.

Q: You have recently signed a deal with Eli Lilly for the drug Baricitinib. But there are doubts about the effect of this medicine on COVID patients. In this case, how will it be helpful for your portfolio and how much demand do you access for it?

A: To put a brake on the way the number of COVID cases is surging in India, it is our and pharma industry’s responsibility to launch all the drugs in India and we are working in the same direction. So, Baricitinib as you said or Molnupiravir, which is our second partnership or antibody cocktail, the third important partnership that we have announced has only a single objective to improve the patients and public health and the number of COVID patients are restricted. And, all types of solutions that are available in the global market should be made available for Indian patients. So, we are working with this expectation. Still few months are left for the launch of these products; therefore, I can’t say anything about the demand, order or sales of these products. But can just inform that as we have seen Remdesivir or Tocilizumab or Favipiravir and these three partnerships about which I have said and trying to launch new products. Combining all these, Cipla’s COVID portfolio is the best in the industry.

Q: You have talked about Remdesivir. How much have you increased the production of Remedisvir and will you further increase its production?

A: We have done a lot of things. When we worked with the central government and state governments and got an idea about its demand than we worked a lot in that direction and it includes work at our own plants, two-three outsourcing with the contract manufacturing plants and capacity buildup at the existing plants, reduction of quality clearance time. We have worked in all the directions and have increased our capacity five times by now when compared to what we were supplying in the first wave. Interestingly, we have also started supplying it. 

Q: Black fungus is being talked about. Let us know about the demand for the black fungus drug Liposomal Amphotericin B? Also, are you facing some problems related to supply and has API prices have gone up here?

A: There is no issue with it. But as we saw with remdesivir that when there is a sudden and unexpected increase in the orders then the companies take some time for manufacturing, raw material availability and increase its capacity. So, we are taking that some time. Our Liposomal Amphotericin B brand phosome is in the market but it is available in short and our next lot will reach the market in the next few days. After that, we will try to supply as much as we can.

Q: How are seeing the first quarter of the new financial year and what guidance will you provide regarding margin and PAT for FY22?

A: One thing is there that we have worked in the market this year in accordance to the revenue and adopted cost control mechanism. At the same time, we have also increased our range of EBITDA as per the launches of new medicines from 16-19% to more than 22%. And, I believe that the way our FY22 business is visible, we will maintain it and also try to increase it. But talking about its quarter-on-quarter split will be difficult now but if seen for the complete year then in the long term as I said we will maintain and increase the 22% EBITDA. 

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