Cipla Shares Rise 10% After USFDA Paves Way For Abraxane Drug Launch – News18

Last Updated:October 31, 2024, 10:01 IST

Cipla Ltd. shares jumped over 10 per cent in early trading on Thursday after the USFDA classified its Goa facility as a VIA status

Cipla Ltd. shares jumped over 10 per cent in early trading on Thursday after the USFDA classified its Goa facility as a “Voluntary Action Indicated” (VAI) status. The Goa facility was earlier re-inspected by the regulator between June 10 – June 21, 2024, post which, six observations were issued.

The VAi status now paves the way for key niche launches like the Abraxane generic.

Abraxane is a paclitaxel-based chemotherapy drug used to treat cancer with a market size of over $700 million. Currently only one generic player, Sandoz, has received approval in October 2024.

Uncertainty that hanged over the launch timeline of Abraxane due to regulatory challenges at the Goa facility, the unit where the drug was supposed to be manufactured, had dented the drugmaker’s growth outlook. The long haul of regulatory issues at Cipla’s Goa manufacturing site had resulted in multiple delays for Abraxane’s anticipated launch, prompting analysts to project it as a potential opportunity only in FY27.

However, Goa facility’s approval has opened the doors for the company to go ahead and launch Abraxane, a development that is seen in the positive light by brokerage firm Citi. The brokerage firm remarked that this development has once again improved Cipla’s pipeline visibility as Abraxane remains a key product from the company’s Goa facility.

Brokerage firm Citi said that the generic Abraxane is a key product from Cipla’s Goa facility.

With this clearance, Citi said that there is a possibility of the generic Abraxane can be launched in the current financial year itself, compared to earlier expectations of a delay until financial year 2026 – 2027.

Brokerage firm Citi said that the generic Abraxane is a key product from Cipla’s Goa facility.

With this clearance, Citi said that there is a possibility of the generic Abraxane can be launched in the current financial year itself, compared to earlier expectations of a delay until financial year 2026 – 2027.

The brokerage has built in $24 million to $48 million of sales for product into financial year 2026 and 2027, which can go up by $25 million to $40 million.

The development once again improves pipeline visibility for Cipla, Citi wrote in its note. Citi has a “buy” recommendation on Cipla, with a price target of ₹1,830.

Out of the 38 analysts that have coverage on Cipla, 21 of them have a “buy” rating on the stock, eight of them said “hold”, while nine of them have a “sell” rating on the stock.

Shares of Cipla are currently trading 8 per cent higher on Thursday at Rs 1,528. The stock is up 22 per cent so far on 2024.

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