FDA observation to hit Lanreotide supply; Cipla may face earnings risk

Cipla said supplies of its key US drug Lanreotide will remain constrained after its manufacturing partner paused production following USFDA observations

In an exchange filing on Wednesday, Cipla Ltd said that supply of its key US drug Lanreotide injection will remain constrained in the near term after its exclusive manufacturing partner Pharmathen International S.A. temporarily paused production following inspectional observations by the US Food and Drug Administration (USFDA).

 

The US drug regulator conducted an inspection at Pharmathen’s Rodopi manufacturing facility in Greece between November 10 and 21, 2025, and issued nine inspectional observations in a Form 483. A redacted version of the Form 483 was made public on January 7, triggering media reports and sharp movement in Cipla’s share price.

 

Lanreotide injection — used for long-term treatment of acromegaly (a growth hormone disorder) and gastroenteropancreatic neuroendocrine tumours in patients who cannot be treated with surgery or radiation — is estimated by JPMorgan to have contributed about $135 million, accounting for roughly 15 per cent, to Cipla’s US sales in 2024-25 (FY25). JPMorgan estimates that Lanreotide products will contribute to Cipla’s US sales $115 million in FY26, $109 million in FY27, and $97 million in FY28.

 

Lanreotide, supplied exclusively by Pharmathen to Cipla’s US subsidiary Cipla USA Inc., is among the company’s top three products in the US market. Cipla said production has been temporarily halted to support remediation efforts, and that it expects full-fledged supply to resume in the first half of FY27, subject to regulatory and quality clearances. Until then, the product will remain in limited supply.

 

Cipla’s shares fell about 4 per cent on Wednesday, underperforming the NSE Pharma index, which gained around 1 per cent.

 

JPMorgan said the Form 483 observations at Pharmathen add to regulatory overhang for Cipla. While the brokerage said an Official Action Indicated (OAI) classification or warning letter would likely allow existing US supplies to continue, it cautioned that a worst-case import alert without product exemptions could impact Cipla’s FY27-FY28 earnings by 4-6 per cent.

 

JPMorgan flagged concerns around observations related to microbiological controls, aseptic processing, data lapses, and repeat deficiencies in standard operating procedures (SOPs). The brokerage said further clarity is awaited from management on supply chain de-risking and pipeline exposure to Pharmathen.

 

Nuvama Institutional Equities also flagged near-term earnings risks from the supply disruption. The brokerage said the temporary production pause at Pharmathen introduces uncertainty around Cipla’s US performance in FY27, given Lanreotide’s high-margin profile and limited competition. Nuvama cut its FY27 earnings estimates for Cipla, citing the risk of prolonged remediation timelines and rising competitive intensity in the US generics market. It said regulatory clarity at the supplier facility would be a key monitorable going ahead.

 

Cipla said it is closely monitoring supply levels and remains committed to restoring stable and reliable availability of Lanreotide at the earliest.