Bloomberg News

Cipla Medpro Slumps Most in Three Months on Approval Delays

March 15, 2012

Cipla Medpro South Africa Ltd. (CMP) fell the most in three months after the generic drug maker said delays in government approvals for medicines curbed sales.

Shares in the company declined 3.8 percent to 6.51 rand at the close in Johannesburg, the biggest drop since Nov. 29.

“There are other regulatory problems. The slow approval of generic medicines is also a problem that’s an industrywide thing. It’s a real excuse,” Drikus Combrinck, a portfolio manager at PSG Konsult, said by telephone from Pretoria. “The market might be a bit disappointed about that.”

Cipla’s anti-retroviral tender business didn’t “materialize to the numbers we expected,” the company said. The company won about 15 percent of a 4.16 billion-rand ($543 million) contract to supply AIDS treatments in December 2010. The slow government registration process for drugs “continues to weigh heavily on our business,” Cipla said in a statement today.

“Although we experienced slower growth than expected, we believe 2012 will be better,” the company said. “Provided, of course, that the registrations we expect materialize.”

Earnings per share adjusted for one-time items for the year through December rose 83 percent to 80.8 cents, beating the 59.1 cents median estimate of seven analysts polled by Bloomberg.

Results were also boosted by an undisclosed settlement with Pfizer Ltd. and Pfizer Laboratories (Pty) Ltd. after it claimed damages over an “incorrectly obtained interdict against the group’s amlodipine besylate products in 2003,” Cipla said.

To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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