Cipla share price rose 5 percent in the early trade on December 14 after the company reached the settlement of its litigation with Celgene Corporation.
The company announced the settlement of its litigation with Celgene Corporation, and wholly-owned subsidiary of Bristol Myers Squibb relating to patents for REVLIMID (lenalidomide).
As part of the settlement, the parties will file consent judgments with the United States District Court for the District of New Jersey that enjoin Cipla from marketing generic lenalidomide before the expiration of the patents-in-suit, except as provided for in the settlement.
In settlement of all outstanding claims in the litigation, Celgene has agreed to provide Cipla with a license to Celgene’s patents required to manufacture and sell certain volume-limited amounts of generic lenalidomide in the United States beginning on a confidential date that is some time after the March 2022, company sai in the press release.
In addition, Celgene has agreed to provide Cipla with a license to Celgene’s patents required to manufacture and sell an unlimited quantity of generic lenalidomide in the United States beginning no earlier than January 31, 2026, it added.
“This is an important step forward for us and is in line with our pursuit of improving access to high quality life-saving treatments,” said Arunesh Verma, CEO, Cipla North America.
Credit Suisse
Research house has kept outperform rating and raised the target price to Rs 885 from Rs 835 per share. It surprised positively with settlement on gRevlimid and could lead to a potential entry in FY23, said Credit Suisse.
The settled market share is not known for FY23-FY26. NPV of gRevlimid opportunity for Cipla is about USD 300 million. The settlement gives company certainty over cashflows, while it will also boost US sales run rate, reported CNBC-TV18.
Nomura
Nomura has maintained buy rating with a target at Rs 861 per share. The target price does not factor in potential upside from Revlimid Generic. However, potential value of Rs 42 per share for Revlimid Generic is an opportunity.
It assume Revlimid Generic launch in October 2022, around 6 months after Natco and volume restricted market share rises to 8% by October 2025, reported CNBC-TV18.
At 09:18 hrs Cipla was quoting at Rs 791.10, up Rs 35.25, or 4.66 percent on the BSE.
The share touched its 52-week high Rs 829.00 and 52-week low Rs 356.75 on 13 October, 2020 and 13 March, 2020, respectively.
Currently, it is trading 4.57 percent below its 52-week high and 121.75 percent above its 52-week low.
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