Momentum in ANDA filings, building on the base of limited competition complex generics and specialty products in the US, and a hawk eye on costs were among the key themes presented by the senior management of Indian firm Cipla Ltd. at the J.P. Morgan Healthcare Conference in San Francisco.
Cipla’s managing director and global CEO, Umang Vohra, outlined the company’s ongoing efforts to grow the US business towards a “billion dollar enterprise” including via a differentiated pipeline centered around HIV, respiratory and oncology therapies and a focus on the specialty segment.
The company has traditionally derived a smaller proportion of its revenues from the US market compared with some large Indian peers, and Vohra indicated that he expects the US contribution to revenues to go up to 30% in FY2021-22 as against about 18% in FY2016-17. India will, however, continue to be the fulcrum of Cipla’s growth story, providing a strong base for global expansion.
The US scale up is expected to be achieved via a “continued traction” on filings and launches and a ramp up in the specialty sector through in-house capabilities and partnerships, details in a Jan 9. presentation by Vohra indicated. Cipla is among the top 10 most dispensed generic companies in the US.
Approvals for differentiated products such as budesonide (a generic version of AstraZeneca PLC’s Pulmicort Respules), decitabine (Otsuka America Inc.’s Dacogen) and sevelamer (Genzyme Corp.’s Renvela) demonstrate the firm’s capability in niche areas, the CEO noted. The Mumbai-headquartered firm expects to maintain the momentum in its annual US filings run rate - around 20-plus - in the coming years.
Cipla’s specialty play essentially entails building a differentiated respiratory and CNS pipeline and Vohra referred to using the tizanidine patch as a “launch pad” for the business. A Phase Ia study for the patch, that was in-licensed from MEDRx Co. Ltd., has been completed and the results are under analysis. In April 2017, Cipla signed a licensing pact with MEDRx to further develop and commercialize MRX-4TZT, a tizanidine patch for the management of spasticity; the partners believe MRX-4TZT could potentially emerge as the first transdermal muscle relaxant worldwide.
At the time of the second quarter results, Vohra had also stated that Cipla was evaluating inorganic opportunities in the neurology and respiratory space, with an emphasis on “finding niches with well-articulated medical needs and useful innovative solutions that are payer friendly.”
Cipla aims to be a “significant” global specialty player in the respiratory and CNS segments - it expects its specialty franchise to contribute 20% of overall revenues in the future.
Cushioning Against Market Volatility
Vohra also hopes to push deeper into certain newer markets, with an eye on “incremental volume growth”.
In markets like Australia and Colombia, he expects to expand Cipla’s presence through its respiratory portfolio; in China and Brazil the effort is towards developing a presence through the oncology and respiratory pipeline.
Cipla had earlier launched fluticasone propionate/salmeterol, its generic equivalent of GlaxoSmithKline PLC’s Seretide asthma therapy in Australia, with the management referring at the time of the Q2 earnings call to the product’s “fantastic” launch trajectory in that market. Cipla’s fluticasone propionate/salmeterol is currently sold in more than 40 countries. (Also see "Cipla Primes For US Momentum But Seretide Generic Is Slow In UK" - Scrip, 8 Nov, 2017.)
“Cipla’s presence in other key markets will serve as our demographic dividend by bringing in high volumes and cushioning against market volatility,” details in Vohra’s presentation at the J.P. Morgan Healthcare Conference showed.
Cipla declined any further comment on these market expansion plans, among other details, citing the quiet period ahead of its third quarter results announcement.
Vohra also expects to continue the momentum of the firm’s “ambitious” cost optimization programs in order to boost margin profile and future growth.
“Cost containment initiatives in direct and indirect spends have resulted in significant margin improvement and driven synergy, simplification and efficiency.”
The CEO referred to supply chain optimization efforts that have led to an increase in OTIF (On Time In Full) and reduction in stock-outs.
Cipla has over the recent past effected sharp business optimization plans including a revamp in Europe that largely entailed a shift from direct-to-market (DTM) to a business-to-business (B2B) model; it has also proactively "simplified" its business in emerging markets, rationalizing markets where necessary and ensuring focus only on high growth markets where it holds a leadership position. (Also see "Operational Fixes At Cipla But All Eyes On Generic Advair" - Scrip, 25 May, 2016.)