Forbes Emergent 25: Under Samina Vaziralli’s Guidance, Cipla Gets A Shot-In-The-Arm From US Acquisition
In 2011, Samina Vaziralli, a third-generation scion at Cipla, was being groomed for succession with her younger brother. Four years later he stepped out, leaving her to take on the legacy of India’s third-largest pharma company.
By 2016 Vaziralli had moved to the highest executive post, vice chairman, at the Mumbai outfit and charted an expansion course encompassing India, the U.S. and South Africa — with China and Brazil also in her sights. That included spearheading the company’s entry into the U.S. in 2015 through the acquisition of two generic-drug makers valued at a total of $550 million.
Until then, Cipla — which makes drugs to treat respiratory and cardiovascular diseases as well as cancer, malaria, and AIDS — had worked with partners in the U.S., the world’s largest pharma market, handling R&D and manufacturing but selling the drugs under its partners’ labels. “The value was all in the front-end and we wanted to own the front-end,” says Vaziralli. “We had the capability and the technology. So we decided to launch ourselves.”
The results are there to see. Revenue from the North American market has surged to $392 million in the year ended March 31, 2017, from $148 million in the year ended March 31, 2015. North America contributes 18% of total revenue, and there’s more to come as Cipla has 97 drugs awaiting final approvals from the U.S. Food and Drug Administration. A further 40% of revenue comes from the domestic market and about 12% from its South Africa portfolio. For the first nine months of hibefiscal 2018, revenue from the maker of branded and generic drugs rose 13% to $1.8 billion, while net profit rose 22% to $198 million.
Vaziralli, 42, didn’t grow up with the idea of running the company, which was founded by her paternal grandfather in 1935. She did an undergraduate degree in commerce at Mumbai’s Sydenham College, then headed to the London School of Economics in 1998 for a Master’s in finance, joining Goldman Sachs in London right after. She moved a couple of years later to their New York office, then returned to India in 2004 and took a break from work to focus on family.
In 2011 she joined Cipla, where her uncle, Y.K. Hamied, is non-executive chairman and her father, M.K. Hamied, is non-executive vice chairman. The family, which has a $2.5 billion net worth stemming from a 37% stake in Cipla, decided to hand over operational control to professionals at that time. Vaziralli started shadowing her uncle and father and soon became the company’s global head of strategy and M&A.
It was a rocky period marked by top-level exits and changes in business direction. Vaziralli steadied the boat by building a second and third line of professionals. Cipla hired a CEO with whom she works closely; he handles operations and she acts as the bridge between family and management as well as family and the board. In 2015, her brother, Kamil Hamied, left to become a venture capital investor in London, something he had flagged a year before. The transition “was fairly easy,” Vaziralli says.
A key element of the Cipla legacy is affordable drugs, in particular life-saving HIV drugs, primarily in Africa. It’s seen as a savior in countries like Uganda, which were ravaged by AIDS. “There was a time when the (Ugandan) capital city of Kampala would be lined with coffin makers — when you drove up from the airport,” says Vaziralli. All that changed when Cipla made antiretroviral drugs available for less than $1 a day. “In Dr. Hamied’s words, what’s the use of developing lifesaving medicines if you can’t make them affordable to the patients?” asks Vaziralli, quoting her uncle.
As a woman in business, Vaziralli says one of the key strategies she uses for work-life balance is to set priorities. “Everyday you have to make a choice — a choice to embrace one thing and to let go of another,” she says. “You also have to create a support system.”
Her two sons sometimes do homework at the Cipla headquarters, or drop in to have lunch with her. She also makes time to attend squash tournaments with her elder son, a nationally ranked player, and whips up pastries over weekends with her younger son. And she finds respite in exercise, running three or four half-marathons every year. “My best thinking and focus has come when I am running,” she says.
This article originally appeared in Forbes Asia.
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CFO Perspectives: In Conversation With Kedar Upadhye
1. Indian healthcare is one of the fastest growing sectors, with an increase in the size of middle-class households coupled with the improvement in medical infrastructure and increasing penetration of health insurance in the country. What are the opportunities you foresee for the industry?
The Pharmaceutical industry has grown rapidly over the last decade and has been instrumental in driving generics penetration globally. Over the last 15 years, Indian companies have done well in the generic business and India remains an attractive destination for generic R&D and manufacturing of pharmaceuticals owing to its strong capabilities across the value chain.
While pharmaceutical industry has been impacted by several challenges like patents issues, significant price erosion, increasing competition and increased regulatory scrutiny in global markets. However, we believe that Indian pharma industry owing to its strong fundamentals, can overcome these challenges and can turn to the trajectory of strong growth.
As an organization, we have a positive outlook on domestic markets. The profile of diseases is changing in India from communicable diseases like malaria, diarrhoea to lifestyle diseases like heart diseases, diabetes and metabolic disorder problems. There are lot of opportunities for pharma companies in this newer space where the growth will be promising and margins will be better. But affordability would still remain as the key theme for India market. The pharma companies need to be cognizant of the cost and would need to focus on cost optimization to grow margins.
2. What would be your key drivers for growth in the next three years?
Our key drivers for growth in the next three years would be:
- Expanding domestic markets and specialty products: Our company has been focusing on expanding its reach and recall in respiratory diseases. The company engages directly with patients, addresses social stigma and environmental concerns to expand the brand footprint in respiratory diseases. As part of our growth plan, we plan to increase our investments in this high margin segment. Efforts are aligned on improving profitability driven by greater share of high margin SKUs and country rationalization.
- Focus on US markets: The Company has started to focus on the US markets to grow revenues and improve overall margins. The Company has launched multiple new products and has a cumulative annualized sales run-rate of about $400M. In the coming quarters, the company will continue to build on these launches and introduce new products with a focus on differentiated products.
- Exploring the alternative channels: Our Company has started to partner with the innovative companies like MEDRx for various categories under specialty products in US. In addition, for domestic market, we are also collaborating with companies like Novartis and Roche to build a product portfolio and at the same time leverage existing opportunities available in the market.
3. The company has increasingly been making investments in the US markets—will this be a refocus on strategy from domestic to international business? Do you expect an improvement in margins as a result of effective execution of your US strategy?
There is no shift of focus from domestic to international markets. Instead of a shift in focus, the investments in US markets are part of our overall global strategy.
Cipla is utilizing selective licensing opportunities for driving sales, in addition to its own pipeline, while our domestic and other key markets, such as Africa continue to grow at a healthy pace. Given our small scale in the US market currently, US is offering the biggest opportunity for us, despite pricing pressures and regulatory compliance. In the longer run, our efforts on specialty products like respiratory, CNS (neurology) and oncology drugs should also yield good results. Currently, our pipeline is strong and evolving and would remain in focus. In terms of margins, domestic market India and South Africa are at peak margins whereas the US markets have not yet started generating margins post R&D and manufacturing costs. Unlocking value in US markets will help improve our margins. We are careful in evaluating our investments, markets and portfolio to drive efficiency and reduce complexity. We are looking at all these investments with a clear focus on high margin, high return expectations.
4. Given the volatility and uncertainty (especially w.r.t, the US policies) how would you, as a CFO, balance growth expectations and margins?
Business is always run in an uncertain environment which stems sometime from external environment and other times from internal environment. As a modern day CFO, there are three key things I focus on to support growth of our businesses:
- Always have a clear governance agenda: Governance principles serve as our safeguards against the uncertainty in the environment. The CFO, besides acting as a strategic partner to the CEO, plays a vital role in presenting the public face of the company to investors, regulators and policy makers. The CFO plays the lead role in keeping the stakeholders well informed about the company. He should ensure that the company maintains an open and transparent communication with its stakeholders in order to build and enhance confidence.
- Reinventing the Finance function: While the changes are inevitable with the emerging trends in businesses, as a CFO, I feel it is equally or more important for the finance function to be radical. Not just the access to information but speed of information along with the analytics would be key for the business to make the right decisions at the right time. Reinventing the finance function from a support function to a business partnering function would be the key.
- Partnering for growth: As a CFO, I feel it is important to own growth. CFOs are becoming increasingly involved in business strategy, and need to fully understand company’s operations. It is critical for a CFO to work with business to deliver growth and improve our margins. CFOs should help business to use leveraging data and provide insights to make more knowledgeable business decisions and increase the bottom line.
This article originally appeared in Deloitte Newsletter.
Cipla Receives Final USFDA Approval for Generic Depo-Testosterone® (Testosterone Cypionate for Injection 100mg/ml and 200mg/ml)
Cipla Limited, today announced that it has received final approval for its Abbreviated New Drug Application (ANDA) for Testosterone Cypionate Injection 100mg/ml and 200mg/ml from the United States Food and Drug Administration (US FDA).
Cipla’s Testosterone Cypionate Injection 100mg/ml and 200mg/ml is AO-rated generic therapeutic equivalent version of Pharmacia and Upjohn’s Depo-Testosterone®. It is indicated for replacement therapy in males in conditions associated with symptoms of deficiency or absence of endogenous testosterone.
According to IQVIA (IMS Health), Depo-Testosterone® and its generic equivalents had US sales of approximately $191M for the 12-month period ending April 2018.
The product is available for shipping immediately.
Cipla Receives Final Approval for Generic Sustiva® (Efavirenz Tablets 600mg)
Cipla Limited, today announced that it has received final approval for its Abbreviated New Drug Application (ANDA) for Efavirenz Tablets 600mg from the United States Food and Drug Administration (US FDA).
Cipla’s Efavirenz Tablets 600mg is AB-rated generic therapeutic equivalent version of Bristol-Myers Squibb Pharma Company’s, Sustiva®. It is indicated in combination with other antiretroviral agents for the treatment of human immunodeficiency virus type 1 infection in adults and in pediatric patients at least 3 months old and weighing at least 3.5 kg.
According to IQVIA (IMS Health), Sustiva® and its generic equivalents had US sales of approximately $105M for the 12-month period ending April 2018.
The product is available for shipping immediately.
Cipla Receives Final Approval for Generic Isuprel® (Isoproterenol Hydrochloride Injection USP, 0.2mg/mL)
Cipla Limited (“Cipla”), today announced that it has received final approval for its Abbreviated New Drug Application (ANDA) for Isoproterenol Hydrochloride Injection USP, 0.2mg/mL, single-use sterile Ampoule from the United States Food and Drug Administration (US FDA).
- Cipla’s Isoproterenol Hydrochloride Injection USP, 0.2mg/mL, ampoule is AP-rated generic therapeutic equivalent version of Hospira Inc’s Isuprel® Injection, 0.2mg/ml and is indicated for the treatment of…
- Mild or transient episodes of heart. block that do not require electric shock or pacemaker therapy.
Serious episodes of heart block and Adams-Stokes attacks (except when caused by ventricular tachycardia or fibrillation).
- Use in cardiac arrest until electric shock or pacemaker therapy, the treatments of choice, is available.
Bronchospasm occurring during anesthesia.
- As an adjunct to fluid and electrolyte replacement therapy and the use of other drugs and procedures in the treatment of hypovolemic and septic shock, low cardiac output (hypoperfusion) states, congestive heart failure, and cardiogenic shock.
According to IQVIA (IMS Health), Isuprel Injection and its generic equivalents had US sales of approximately $148M for the 12-month period ending April 2018.