HDFC Securities: Cipla’s gRevlimid Settlement - The Unaccounted Upside
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HDFC Securities Report
Cipla Ltd. settles patent litigation with Celgene (Bristol Myers Squibb) in the U.S. for gRevlimid (approximately 7.6 billion U.S. dollar).
As per the settlement terms, the company is licensed to sell volume-limited quantity after March 2022 and without volume-restriction after January 31, 2026 subject to product approval from the U.S. Food and Drug Administration.
While the details pertaining to launch date and market share are not disclosed, the opportunity can add a net present value of Rs 40 per share to our target price in a base case scenario (assuming 5-10% market share, 30-50% price erosion between FY23-26).
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