Cipla was founded by Dr. K. A. Hamied in the year in 1935. Over a long period of 78 years since 1935, Cipla has grown to become one of the largest pharmaceutical names, not only in India but also worldwide. Cipla has a strong presence in over 170 countries Today’s Cipla has 34 manufacturing facilities and 2000 products, and employing 20000 personnel catering to a wide spectrum of diseases. The company’s Research and Development (R&D) Centre has spearheaded and delivered many new products. The company claims to be one of the world’s largest generic pharmaceutical products manufacturers.
The 78 year journey of Cipla has seen many unique milestones. The Company has a rare distinction of a visit by Mahatma Gandhi in 1939.
During the During World War II the company has helped India by manufacturing life saving drug formulations. In the 1960s, ventured into bulk drug manufacturing in the industry in India.
In 1970, Ciplas’ efforts in getting the New Patent Law in force paved the way for Indian pharmaceutical companies manufacture a patented product.
In 1978, Cipla introduced Metered-Dose Inhaler (MDI). Today, Cipla is world’s largest supplier of inhaled medication and devices.
The most notable effort was in 2001, when Cipla made HIV treatment drug Antiretrovirals (ARVs). This drug brought down the cost of treatment for HIV infected patients dramatically, making HIV treatment affordable to millions of patients. Similarly in 2012, the prices of cancer drugs, also got reduced due to the company’s efforts.In 2005 the company produced an anti-flu drug helping the Government combat the Bird Flu epidemic. This was done within a short period of 3 months.
Recently the company has started concentrating on profitability. This could be seen in the moves by Cipla in the USA where it has started filing applications with the US Food and Drugs Administration (USFDA). In the USA it is seeking approval for its generic products. It is also on verge of building its own sales team. Cipla’s initiative in the lucrative US market is likely to increase the profit targets. When we look at the background of the company’ extensive range of products and well established research and Development, it very likely to reap rich benefits in the US markets.
Not only the US market, joint ventures and even acquisitions are being planned in Turkey, Morocco, Brazil and Nigeria. This does not mean that the domestic market is downplayed. The company has plans to increase its market share in the Indian market.
Cipla has made substantial investments in the manufacture of Biosimilars and Active Pharmaceutical Ingredients (APIs). These investments are likely to bring in more profits to the company. Cipla has built up a reputation as a low cost drug maker. Looking at the company’s activity in the past confirms this statement. The company is, like many other Pharmaceutical companies vulnerable to tough market competition. The profits margins of Cipla can go lower. This does not pose a major problem to the company, because of the extensively large range of products and market share. There are positive news too. For example the share of Europe and Australasia has grown from 26 per cent in FY 2010-11 to 30 per cent in 2011-12. The sales were also growing at 32 per cent and 18 per cent, respectively.
Considering the market leadership of the company in the key areas like respiratory care, Anti-Viral and Urology, this company becomes an attractive one from an investor’s angle. At the time writing this notes the company’s share were trading at Rs. 397. Investors with a longer time frame in mind can consider this stocks for their portfolio.
Disclaimer: I do not hold any shares or vested interest in this company.
