Cipla shares rose over 2.5% in afternoon trade on July 29, with the stock trading at ₹1,483 on the NSE at around 1:45 pm, as reported by Moneycontrol. The positive market reaction came after Nomura issued a research note stating that the company's USFDA approval for generic Advair Diskus "builds execution credibility" and could provide upside to its North America business. The approval represents a significant milestone for Cipla as it marks the company's first dry powder inhaler approval from its US-based manufacturing network, specifically the Fall River (InvaGen) facility after being site-transferred from the Indore facility in India, which faced regulatory scrutiny by the USFDA in 2023.
According to IQVIA data cited by Nomura, the US market for fluticasone propionate and salmeterol inhalation powder is approximately $941 million annually, significantly higher than earlier expectations of $500-550 million. Nomura estimates that Cipla can generate ~USD 30-40 million in annualised revenues from the product, with the brokerage noting that "the competitive intensity is high and thus the revenue potential is limited." The approval has shifted Street attention from regulatory progress to commercial execution, with Nomura expecting Cipla "to gain a 10-15% market share," adding that the product "may thus generate annualised $30-40 million in sales" and could present some upside to their current estimate of $20 million for FY28. Kotak Securities maintains a Buy rating with a target price of ₹1,675, expecting the product to generate $22 million in FY27 and $28 million in FY28 US sales.
According to CNBC TV18, Achin Gupta, Managing Director and Global CEO, Cipla Limited, stated that "At Cipla, we're passionate about respiratory care given our longstanding expertise. This approval reinforces our commitment to expanding access to complex therapies in the U.S. and highlights our strength in developing and scaling sophisticated inhalation products through integrated capabilities." Nomura reports that Cipla is the fifth generic player to receive approval for the product, with the approval coming after four years of regulatory delays, with the company originally guiding for a launch in H2 FY23. Competition remains limited to players such as Teva, Mylan, Hikma and Aurobindo's Respirent, leaving room for Cipla to capture a 12-18% market share, supported by its respiratory franchise and expertise in complex inhalation products.
As reported by CNBC TV18, the approval is particularly significant as it comes from Cipla's US manufacturing facility*, a strategic positive at a time when US-based production is gaining importance amid the Trump administration's tariff push and increasing scrutiny of overseas generic drug manufacturing. The company eventually shifted manufacturing and the filing for this complex dry powder inhaler to its US manufacturing site, which has now secured the approval. The US Advair market is now estimated at $941 million, well above earlier expectations, and sometimes a delayed launch isn't a missed opportunity - it arrives just as the market and geopolitical landscape become more favorable. The street was initially skeptical of the opportunity diluting, but in fact it may actually be bigger today given the expanded market size and favorable competitive dynamics.
According to Nomura, the brokerage has factored in $907 million in North America Generics (NAG) sales for FY28, compared with "the $1 billion+ expectation set by management," which has guided to achieve $250 million in NAG revenues by Q4FY27. Nomura maintains that execution will remain the key monitorable as the company moves towards achieving its FY27 guidance, while JPMorgan maintains an Overweight rating with a target price of ₹1,600, noting that the approval marks Cipla's first dry powder inhaler from its US manufacturing facility and believes the market remains competitive but is sizeable and stable. The approval represents Cipla's first dry powder inhaler (DPI) approval* from its US-based manufacturing network, marking a significant milestone in the company's continued expansion of complex respiratory capabilities in the United States.
