Cipla's race to be a frontrunner in the asthma market received a setback last week when an Italian company got the nod to sell an anti-asthma drug in Germany, and, Cipla's stock was squarely impacted in the bargain.

The downturn continued on Monday, with Cipla dipping 0.5% to Rs 824 on BSE in half-an-hour's trading . Volatility was also evident in the fact that the scrip had risen from the day's low of Rs 812.10. Around 2,200 Cipla shares were traded on BSE so far.

The scrip lost 2.2% to Rs 828.35 on Friday, recording its 52-week closing low, following the news. The scrip has come off sharply from Rs 943.10 on 9 January 2003 also affected by its disappointing Q3 results.

Cipla's proposed launch of anti-asthma inhalers in Germany, already delayed, was seen as a key trigger for the stock. But with an Italian company pre-empting it, the stock was bound to take a beating.

As per reports, Italy's Chiesi Farmaceutici has received approval for selling budesonide-based inhalers that use ozone-friendly HFA propellants, in Germany. Budesonide is an anti-asthma drug.

For Q3 ended 31 December 2002, the pharma major posted a modest 6% rise in net profit to Rs 66.46 crore compared to Rs 62.65 crore in the corresponding period of the previous year. Net sales increased by 5% to Rs 387 crore (Rs 3.87 billion) from Rs 366.91 crore (Rs 3.66 billion).

Both net sales as well as net profit came in below capitalmarket.com poll projections - a 20-30% growth in net profit to Rs 75 crore-81.6 crore and net sales of between Rs 423.7-Rs 439 crore (Rs 4.23-4.39 billion), a rise of 15.7-19.8%.

The 60% fall in other income and 63% rise in depreciation capped the rise in PAT at 6%. Despite the modest results, the company registered a decent 320 basis points rise in operating margins to 23% from 19.8%.

In December 2002, the Drug Controller General of India directed the state drug authority of Silvassa to suspend the license for the manufacture of Montair Plus. Montair Plus is a fixed dose combination of montelukast and bambutarol, which was manufactured by Okassa Pharma and marketed by Cipla. The suspension was necessitated as Okassa Pharma had not taken the necessary approval from the Drug Controller General of India for manufacturing and marketing the product. The DCGI has also advised Cipla to withdraw all the stock of the product from the market.

The company, meanwhile, has also entered into a strategic alliance with California-based Watson Pharmaceuticals Inc., to develop, manufacture and market 10 generic pharmaceutical products, many of which are currently under development. Under the agreement, Watson will have exclusive US marketing rights to all the developed products and will also own the regulatory filings. On approval of the products, Cipla will manufacture and supply products to Watson.

BSE Code: 500087