Cipla shares downgraded, price target cut after temporary halt to production of a key drug

Shares of drugmaker Cipla Ltd. will be in focus on Friday, January 16, after the company said in an exchange filing that it is temporarily pausing the manufacturing of a key drug.

Cipla said that the manufacturing of the drug Lanreotide is being temporarily stopped to support the USFDA remediation at the facility which produces the said drug.

Lanreotide is one of Cipla's top three products in the US market. The US market itself contributed to 27% of Cipla's topline in financial year 2025, registering record sales of $934 million during the previous year. During the September quarter this year, US sales for Cipla stood at $233 million from $230 million respectively.

The US Food and Drug Administration (USFDA) inspection at Pharmathen's Rodopi facility in Greece in November 2025 had resulted in nine observations.

Pharmathen is a contract manufacturer (CDMO) and is the exclusive supplier of the Lanreotide to Cipla. The exchange filing went on to add that the re-supply of Lanreotide is expected to resume in the first half of financial year 2027.

"The company will closely monitor supply levels and is fully committed to restoring stable, reliable supply of Lanreotide expeditiously," Cipla stated in its filing.

Cipla has a 22% market share in Lanreotide in the US market.

Brokerage firm Morgan Stanley has cut its price target on Cipla to ₹1,292 and also cut its earnings growth estimate by 2% for financial year 2026 and 1% for financial year 2027.

The brokerage said that any prolonged disruption in supply will lead to market share loss and downside risk to our financial year 2027 and 2028 earnings estimates.

Nuvama has downgraded the stock to "reduce" and cut its price target to ₹1,360, stating that the recent developments for Cipla are negative and that this, along with the expiry of the generic

Nomura though, believes that the potential loss of Lanreotide sales have largely been factored in to the stock price, as since the news was announced earlier this months, the stock is already down 6.5%.

The brokerage maintained its "buy" rating on the stock with a price target of ₹1,770.

Shares of Cipla ended 1% lower on Wednesday at ₹1,433.5. The stock has already declined 4.5% during the first 10 sessions of 2026.