78 | forbes india december 29, 2017vikas
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Richest
10 0 Ind IansTheseveral emerging markets where
we have a leadership position.”
Cipla is now narrowing the canvas
in which it operates by exiting some
countries and focusing on select
business areas and geographies.
The front-end in the US was
established in January 2015 and
bolstered with the acquisition of
two US-based companies, InvaGen
Pharmaceuticals and Exelan
Pharmaceuticals. The acquisitions
were announced in September 2015
and completed in February 2016.
As part of its growth strategy,
Cipla also wants to move up the
value chain and make complex
generics and specialty drugs. It plans
to file for 25 ANDAs (abbreviated
new drug applications) with the
US regulator in FY18 and launch as
many as 10 products in the remaining
months of this fiscal. The company
already has 238 ANDAs in the US,
including those that are approved
and those awaiting regulatory nod.
Cipla also wants to focus on its
existing business in South Africa and
emerging markets such as Brazil and
China, Vaziralli tells Forbes India.
India, too, is an integral part of
its scheme. In India, the focus is on
getting into in-licensing partnerships
with global innovators like Novartis
and Janssen and selling their
drugs in the country. This strategy
is also a hedge against the price
control on vanilla generic drugs
exercised by local regulators. Being
innovator drugs, they are outside
the purview of price control.
Its past challenges
notwithstanding, analysts appear
enthusiastic about Cipla’s prospects.“We expect earnings to improve,
given that it [Cipla] is scaling up in
the US business, trimming costs and
rationalising business,” says Param
Desai, an analyst with Elara Capital,
in a research report dated August 11.t
he management churn that
Cipla witnessed in the past
was also a challenge for
the company. Since 2013, Cipla
has had two CEOs and four chief
financial officers (CFO). Some
other key members of the erstwhile
management also quit in this period.
“We hired people at a time when
we were just embarking on this
journey of transformation and the
journey gathered pace quicker than
we could imagine,” says Vaziralli.
“Some of the talent wasn’t ready for
that second turn of transformation.”
However, the current senior
leadership (apart from Vaziralli)
helmed by MD & Global CEO
Umang Vohra and Global CFO
Kedar Upadhye are holding fort
and have the freedom to run the
company in the manner they deemfit. Cipla is the only large family-
owned pharmaceutical company in
India that has a non-promoter CEO.
Vohra, 46, was heading Dr Reddy’s
Laboratories’ generics business in
North America before joining Cipla
as chief operating officer in 2015.
After taking over as CEO, says
Vohra, Vaziralli and he sat down to
chalk out the remit of their respective
roles. The day-to-day operations,
including the acquisition strategy,
are entirely Vohra’s responsibility.
Vaziralli acts as the lead promoter
assuming the responsibility of “board
stewardship”, focusing on hiring
the right talent in the company
(which employs over 23,000 people),
interacting with the promoters of
companies with which Cipla partners
for projects, and ensuring Cipla
doesn’t lose its “soul and culture”
in the process of transformation.
Vaziralli and Vohra review the
contours of their working relationship
every six to nine months to “stay
honest to what they signed up
for,” says the latter. The equation
appears to be working as many of
the operational tweaks envisaged by
Vohra and his team receive strong
support from Vaziralli. The support is
needed to convince the board, which
includes YK Hamied and MK Hamied.
Take the case of biosimilars, for
instance. Cipla had ambitious plans
of making its own biosimilars end-
to-end. But that plan has now been
shelved. Instead, the company willsamina vaziralli is the bridge between Cipla’s professional management and the board, whose
members include her uncle yk hamied (extreme left) and father mk hamied (extreme right)Source: Moneycontrol.comcipla’s Financial perFormance
(Revenue, Ebitda and net profit in ` cr)FY12 FY13 FY14 FY15 FY16 FY17
Revenue 7, 0 2 0 8,279 10,100 11,345 13,790 14,630
ebitda 1,798 2,460 2,398 2,327 2,710 2,704
ebitda MaRgin (%) 25.6 29.7 23.7 20.5 19.6 18.5
net PRoFit 1,144 1,545 1,388 1,181 1,360 1,006