Cipla’s Q4 FY08 net profit stands at Rs 179.5 crore as against Rs 125.7 crore while net sales stand at Rs 1,122 crore as against Rs 938.5 crore.

Amar Lulla, Joint MD, Cipla, said the pharma major has crossed USD 1 billion turnover In FY08.  The company has no exposure to forex derivatives or positions, he said. "In FY08, we had a forex gain of Rs 65-70 crore while operating margins stood at 20%."

Cipla is targeting a 12-15% growth in FY09, Lulla said. "We are looking at revocation of MNC patents on anti-AIDS/cancer drugs. The company has also forged niche tie-ups with global companies and expanded current ties in the US."

Excerpts from CNBC-TV18's exclusive interview with Amar Lulla:

Q: You have had a sharp growth in your sales, and net profit has also come in line with expectations, can you guide us through what has led to the growth? Is it exports or is it domestic formulations?

A: Essentially we crossed the 1 billion mark for the first time this year and the domestic sales have grown by about 13%, and the export sales have grown by about 23% for this quarter. So the total growth has been about 16%, which has been in line with estimates.

Q: Going forward, how do you see the supplies to your partners, do you have tie up with your partners for exclusivities, how are these supplies going to be, going forward, how are supplies lined up for you?

A: We have partnerships in different markets, and in different models. But these alliances are essentially product-by-product or country-by-country or territory-by-territory, and different countries have a different model of alliance and the growth has essentially come from these relationships and alliances.|

Q: How are the pricing pressures across your key markets?

A: There are pricing pressures apart from the competition and pricing pressures due to competition, the dollar has also had an impact on from Rs 45 to Rs 40. So all this has happened and yet we are hopeful that going forward we would be able to supply and meet the requirements in this market.

Q: How much of an impact have you taken because of the dollar, is it because you hedge your positions, derivatives or has there been an impact because of the rupee appreciation during the year?

A: We have had no derivatives; we do not indulge in any derivatives. We haven’t taken any positions on that, but we have had a forward cover for foreign exchange and in fact we have gained substantial gains due to foreign exchange to the extent of about Rs 65 crore to Rs 70 crore.

Q: How have been your margins in this quarter?

A: The operating margins have been slightly better. For the year it has been about 20% as compared to 18% previously. So it has improved slightly. For the quarter it is about 17.7%.

Q: What is your guidance going forward, how do we see FY09 panning for you in terms of sales and margins growth?

A: We will be very happy to achieve a growth of 12% to 15% in the next year and we will be able to manage the same profit percentages as earlier.

Q: In the last couple of months you had launched a couple of products in the domestic market, including Erlocip and Triohale, how much has been the contribution to the sales and what kind of a growth do you foresee for these products?

A: The initial response to Triohale has been very good, because it’s a very nice product particularly for COPD, being a multi component disease and the treatment needed is multi drug treatment. It has been launched only this month and it has seen very good response from the medical profession and they have all welcomed it immensely and we are hopeful of this product taking good position in the COPD segment.

As far as Erlotinib is concerned, we have made this product available essentially for the benefit of the cancer patients and at a very reasonable price. Going forward, let’s hope that we are able to continue supply to the cancer patients.

Q: What kind of sales did you generate in terms of Erlocip?

A: Erlocip has been on an average about 40-50 lakhs a month. Going forward let’s see whether it will continue to sell that.

Q: In fact Teva has been granted a 180 days exclusivity for the anti-psychotic drug Risperidone. Do you have some kind of an arrangement with Teva on that front in terms of supplies?
   
A: Not on Risperidone.

Q: In fact there were a couple of other products also on which Teva had supply agreements with you like Lanzoprazol and also one of AZI’s drugs, can you guide us through that? Will you be able to take some upsides on these two products in the future?

A: We have a number of other arrangements with Teva and because these will come about as and when they get the approvals and let us see what happens and what this business or market share Teva is able to procure from these products.

Q: In a long time we have not got enough clarity so far as your partnerships in the US is concerned, have you added new partners because the global paradigm in terms of the generics companies have actually changed and a lot of companies have integrated. What kind of foresight do you see in this particular space and what partnerships have you forged, if we can get some numbers and some kind of details on those numbers?

A: The market is altering in the US. There has been a consolidation. There has also been the emergence of new players. A lot of new companies who were looking at the niche markets and niche segments are now emerging, who are being supported by the investors and they are coming into a lot of niche segments and we have been having some partnerships there and also expanding portfolios with existing partners.

So, in terms of partnerships and alliances and products, there has been a good improvement on the opposition. We continue to enjoy getting the benefit of the development fees, which is the model that we have followed. We hope that as and when products get approved sales will happen.

Q: Will you be looking at Erlocip kind of products to be launched in the Indian market because now you have a leeway wherein the court has actually allowed you because of the huge price differential from the innovators product? Will you be looking at any such introduction of products in the near future?

A: We are examining various products. We think the patents are not 100% validly granted. So, we are in the process of either filing the revocation pre-grant or post-grant, and we are hopeful that we will be able to at least get some more products in the market where the patents are not validly granted.

Q: A couple of products that you can toss off immediately?

A: This will be essentially in the category of AIDS and cancer.

Q: How soon do we see such launches?

A: This year itself.

Q: The guidance that you mentioned was about 12-15% on topline and bottomline of about 15%, right?

A: Same percentage, as of now, yes.