Thu Oct 31 06:19:08 UTC 2024: ## Cipla Shares Downgraded Despite Buy Rating: Lanreotide Shortages Impact Earnings
**Mumbai, India -** UBS has maintained its “Buy” rating on Cipla Ltd. shares but lowered its price target from INR 2,060.00 to INR 1,960.00. This adjustment comes as a result of anticipated short-term earnings impacts due to a shortage of Lanreotide, a drug in Cipla’s portfolio.
Cipla expects its third-quarter financial performance for fiscal year 2025 to be negatively affected by the Lanreotide shortage. This will lead to a decline in U.S. sales for the December 2024 quarter, with projections falling to less than $220 million, down from $237 million in the second quarter of fiscal year 2025.
The company has not produced Lanreotide for one to two months due to reduced production at a partner’s facility undergoing expansion. This expansion is cited as a reason for the current supply shortfall. While Cipla clarifies that there are no supply chain issues, the shortage is expected to impact December 2024 quarter results.
However, Cipla expects sales to return to normal in the March 2025 quarter. The company remains optimistic that once the expansion at its partner’s facility is complete, production levels of Lanreotide will stabilize, alleviating the current constraints on supply and sales. The full impact of the capacity enhancement is anticipated to be seen in the following year.
First Piper 