On Thursday, JPMorgan reiterated its Overweight rating on CIPLA:IN stock, maintaining a price target of INR 1,600.00. The renewed confidence comes after CIPLA's Goa plant received a Voluntary Action Indicated (VAI) classification from the US FDA on October 30, which was an unexpected positive development. The plant was previously under an Official Action Indicated (OAI) status since November 2022, and after a re-inspection from June 10 to June 21, 2024, it received a Form 483 with six observations.
The resolution of the plant's status is significant as the analyst had anticipated a continuation of the OAI classification due to the severity of the observations. The positive outcome of the VAI classification is likely to expedite the launch of gAbraxane, a key product whose release was dependent on the clearance of the Goa facility. Originally, the launch was conservatively postponed to the second half of fiscal year 2027, but with the recent developments, expectations have shifted to a much earlier date, previously guided for the fourth quarter of fiscal year 2025.
The Goa plant's clearance is particularly relevant as it could impact the timeline for gAbraxane's market entry. Hengrui/Sandoz has already introduced the first generic version of Abraxane in October. However, Hengrui has indicated that a significant ramp-up in sales is not expected until the following year. Should CIPLA manage to launch gAbraxane by the fourth quarter of fiscal year 2025, it is projected to contribute an additional 2-3% to the company's core earnings for fiscal years 2026 and 2027.
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