Cipla Share Price: The Market is Afraid About Risks That Don’t Exist


Nithya Balasubramanian, Director of Healthcare at Sanford Bernstein, has expressed confidence in Cipla’s resilience despite concerns following the US Food and Drug Administration’s (FDA) warning to its Pithampur facility. Balasubramanian considers the market worries about a potential import alert as unwarranted, emphasizing that the perceived risks are insignificant. She pointed to recent investments by brokerages as a positive indicator of the company’s strong fundamentals.

The FDA’s inspection of Cipla’s Pithampur unit resulted in the issuance of a Form 483, listing eight observations related to data integrity issues. While concerns about a potential import alert have circulated, Balasubramanian downplayed the risk, highlighting Cipla’s alternative source for Albuterol, a critical product from the Pithampur facility, which is also supplied by Cipla’s US facility.

In the face of regulatory scrutiny, Cipla has been instructed by the FDA to engage third-party consultants to address the identified issues. Balasubramanian drew parallels with repeated observations at Cipla’s Goa site, which is already under a USFDA warning letter. However, she emphasized Cipla’s effective resolution of FDA issues at its Goa plant, showcasing the company’s capability for successful remediation.

Even in the event of an adverse scenario, Cipla appears well-prepared, with an alternative supply source and a track record of addressing FDA concerns. The company remains optimistic about its existing commercial product portfolio and expressed confidence in executing its de-risking plan for new products while promptly addressing observed issues.

Shares of Cipla were trading flat around ₹1,197 on November 28, having shed over 4% in the past week. Despite recent market concerns, Balasubramanian’s outlook underscores confidence in Cipla’s ability to navigate regulatory challenges and maintain its strong position in the pharmaceutical industry.

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