Cipla - Regulatory Risks On The Rise: Motilal Oswal

The U.S. FDA inspected Cipla’s Pithampur site between Feb 6 and Feb 17, 2023 and issued form 483 with eight observations.

<div class="paragraphs"><p>Cipla Ltd. (Source: Company website)</p></div>
Cipla Ltd. (Source: Company website)

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.  

Motilal Oswal Report

The U.S. Food and Drug Administration issued form 483 to Cipla Ltd. for its Pithampur site and we assessed that the observations are primarily related to inadequate root cause analysis, handling of market complaints, upgrading of software and gross margin profit records.

We expect Cipla to implement strong corrective and preventive actions to resolve the issues.

We cut our earnings estimate by 3% for FY24 to factor in the delay in g-Advair approval, due to observations in form 483. The Official action indicated at Goa and the recent form 483 at Indore increase the overall regulatory risks from U.S. generics business perspective. Accordingly, we reduce the price-to-earnings multiple to 21 times from 23 times.

Click on the attachment to read the full report:

Motilal Oswal Cipla Company Update.pdf
U.S. Drug Regulator Flags Quality, Procedural Lapses At Cipla Facility


This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.