Cipla shares fall up to 2% as Citi says US FDA nod for generic Advair could help Aurobindo Pharma

Cipla share price

• Cipla shares drop 2% after US FDA approves rival's generic Advair inhaler.
• Aurobindo Pharma's Lannett acquisition may raise US revenue by $30-40 million
• Cipla seeks FDA approval for generic Advair, may add $50M by FY27.

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The shares of Cipla dropped nearly 2 percent to its day's high on January 13 after the US FDA granted its final approval to rival Aurobindo Pharma for a generic version of the GSK's Advair inhalers. Citi called the development a "marginal negative" for Cipla.

The shares of the pharma major dropped to a nine-month low of Rs 1,436.60 apiece, before recovering some losses to close at Rs 1,448 apiece.

US FDA approves Lannett's generic Advair inhaler version:

Respirent Pharmaceuticals and Lannett have received final approval from the US Food and Drug Administration (FDA) for a generic version of Advair Diskus, which is a key respiratory drug used to treat patients suffering from asthma and chronic obstructive pulmonary disease.

Notably, Aurobindo Pharma in July last year had announced the acquisition of Lannett for $250 million. Citi Research said that the generic version will likely add $30 million to $40 million to the company's annual US revenues.

Cipla has been awaiting FDA's approval for its own generic version of Advair. While noting that FDA's approval to Lannett was a "marginal negative" for Cipla, the international firm sees the pharma major getting the approval in near-term.

It further sees Advair contributing $50 million to Cipla's US revenue in FY27.

Cipla share price:

Cipla shares have fallen more than 3 percent in the past five days, and over 4 percent in the past one month. This comes after the stock gained around 76 percent in the past five years.

The stock currently has a P/E ratio of 21.70, and a market capitalization of nearly Rs 1.17 lakh crore.

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