Shares of Cipla dropped about 3.5% after the company announced a temporary pause in the production of its U.S. drug Lanreotide.
Why the stock fell
The halt is linked to a U.S. FDA inspection at Cipla’s European contract maker, Pharmathen, which found nine issues. Production is expected to restart in the first half of fiscal year 2027.
Brokerage reactions
- Morgan Stanley kept an Underweight rating, lowered its target price to ₹1,292 and cut earnings forecasts for FY26 and FY27.
- Nuvama downgraded the stock to “Reduce”, set a target of ₹1,360 and highlighted risks from the Lanreotide pause and upcoming competition.
- Nomura still recommends a Buy, believing the impact is already priced in, with a target price of ₹1,770.
Impact on earnings
Lanreotide generates about $150 million a year and gives Cipla a 22% share of the U.S. market for the drug. Any prolonged shortage could eat into revenue and market share, especially in FY26‑FY28.
What investors should watch
- When Pharmathen resumes production in FY27.
- Progress on the generic version of Advair, which faces new competition.
- The expiry of exclusivity for gRevlimid, another key product.
Bottom line
The current dip reflects real supply‑chain risk, but some analysts think the worst is already reflected in the price. Keep an eye on the restart timeline and upcoming generic competition.
Disclaimer
Remember, this is perspective, not a prediction. Do your own research or talk to a certified advisor before making any investment decisions.