Cipla rises more than 4 per cent after settling over cancer drug Revlimid; earnings likely to boost

Cipla has settled its patent litigation with Celgene over the blockbuster cancer drug Revlimid. Celgene Corporation, a subsidiary of Bristol Myers Squibb, has agreed to provide Cipla with a licence to Celgene’s required patents. Cipla can then sell or manufacture certain volume-limited amounts of generic Lenalidomide in the United States sometime after March 2022.

The specific volume-limited licence date and percentages agreed upon with Cipla are confidential.

In addition, Celgene has agreed that Cipla can manufacture and sell an unlimited quantity of generic Lenalidomide in the United States after January 31, 2026.

It is the fourth company to settle over 8 billion dollar brand Revlimid, after Natco Pharma, Dr Reddy’s Laboratories & Alvogen. There are other Indian pharma companies, which have filed the petition, such as Sun Pharmaceutical Industries, Lupin, Aurobindo Pharma, and Cadila Healthcare.

Despite the contingent erosion of price, Cipla is expected to have some strong cash flows. Reacting to this news, the stock of Cipla was trading at Rs 787.75 per share, up by 4.21 per cent from its previous close and is up by more than 70 per cent in a year.