Cipla Q3 results: Net profit slumps 57% to ₹675 crore on US supply issues

Bets on respiratory product launches and peptides for growth

Pharmaceutical major Cipla’s net profit dropped 57 per cent year-on-year (Y-o-Y) to Rs 675 crore in the third quarter of the financial year (Q3FY26). Revenue from operations remained flat at Rs 7,074 crore, the firm said on Friday.

 

The profits were hit due to supply chain issues in the US for lanreotide -- used to treat certain neuroendocrine tumours -- and the minimal contribution from lenalidomide. The company reiterated that lenalidomide revenues will continue to taper off, but this would be offset by new launches, particularly in complex respiratory products, peptides and injectables in the US market.

 

“We faced some challenges, with one of our key products, Lanreotide, impacted by a supply disruption following a USFDA audit of our partner, Pharmathen. We are working closely on remediation and expect supplies to resume in the first half of FY27. We're also looking at enabling an alternative manufacturing site with our partner,” said Achin Gupta, managing director and global chief executive officer (designate), Cipla.

 

 

The company incurred one-time operating expenses due to preparations for upcoming respiratory product launches, but remains optimistic about the pipeline.

 

Also, following the implementation of the new Labour Codes, the company reported a one-time exceptional expense of Rs 275.9 crore in gratuity and leaves liabilities.

 

On a sequential basis, net profit fell 50 per cent, while revenues declined 7 per cent quarter-on-quarter. Cipla's stock fell 4 per cent on Friday ending the day's trade at Rs 1,314.85 per share on BSE.

 

Cipla weighs semaglutide entry post patent expiry

 

Cipla is also exploring the opportunity to enter the semaglutide market as the patent is expiring this March, with Managing Director and Global CEO (designate) Achin Gupta saying, “We have possibilities to explore on semaglutide, but we would rather wait and watch how the market evolves before deciding on our entry into that space.”

 

The company has entered the obesity space in India through its partnership with Eli Lilly’s Mounjaro (tirzepatide).

 

Cipla said that its current focus is on tirzepatide, given its long patent life and differentiated profile, while it will adopt a wait-and-watch approach on semaglutide as the market evolves and pricing becomes clearer.

 

While GLP-1 products are expected to make a meaningful contribution to revenue, Cipla said margins will be lower than core in-house products due to the in-licensing model, and the company will balance growth with profitability.

 

India business resilient as US performance remains under pressure

 

Cipla’s Indian business performed well, with branded prescriptions posting a growth of 10 per cent Y-o-Y. Key therapies such as respiratory, urology, cardiac and anti-diabetes posted healthy growth. The trade generics segment recorded healthy growth, aided by strong distribution execution, new product launches and technology-led interventions.

 

During the quarter, the company launched eight new products, including its entry into the sexual wellness category to widen therapy coverage.

 

The North America business reported quarterly revenue of Rs 1,485 crore, declining 22 per cent year-on-year due to ongoing lanreotide supply chain issues. The FY27 pipeline includes four major respiratory launches, including gAdvair, with gVictoza expected to be launched in FY27, and three additional peptides slated for launch during the year.

 

The management also stated that its strategic priorities going ahead include deepening leadership in India, expanding into cardio-metabolic and obesity therapies, building global respiratory leadership, pursuing select inorganic opportunities, and increasing focus on innovation and complex products such as peptides, oligonucleotides, biosimilars and cell therapies (CAR-T).