Cipla Executives Resigning, But Company Says Nothing Amiss

Published: Jun 22, 2015

Cipla Ltd. Executives Resigning, But Company Says Nothing Amiss
June 19, 2015
By Riley McDermid, Breaking News Sr. Editor

MUMBAI, India – Over the past half-year, India-based generic drugmaker Cipla Ltd. has seen several high-level executives, including Chief Financial Officer Rajesh Garg, leave the company.

Garg announced his resignation in May. He said he planned to run his own healthcare e-commerce firm. Other notable departures include Sameer Goel, head of India operations, global legal head Murali Neelkantan, medical director Amar Lulla, global head of human resources Navin Garg, information technology chief Arun Gupta and finance head VS Mani. Each of the departing executives provided different reasons to leave, including personal and health reasons, the Times noted.

Stepping into the vacated roles are company chief executive officer Subhanu Saxena, who is overseeing financial management of the company in the wake of Garg’s resignation, Gautam Rohidkar took over as general counsel and Samina Vazirelli took additional charge of human resources.

The departures came within two years of the Cipla’s move from “being a promoter-driven company to being run by freshly-recruited external professional management team,” CNBC reported this morning. The bulk of the C-level executives, about 70 to 80 percent, have been brought onboard to Cipla within the last two years, the Times of India reported.

Although a number of high-level managers have left, a Cipla spokesperson told the Times of India that the company still has a strong team in place that “continues to lead and drive Cipla.” The spokesperson denied internal friction at the company’s top levels as reason for the departure. However, CNBC noted that many mid- to senior-level management positions are reportedly vacant at the Indian drugmaker.

The shakeup at Cipla comes on the heels of a massive turnover of management at rival Indian drugmaker Ranbaxy Laboratories. This week Sun Pharmaceutical Industries Ltd., the parent company of Ranbaxy, terminated 18 top-level executives at that company. More pink slips are expected to be delivered as Ranbaxy undergoes a restructuring following acquisition by Sun Pharma. Ranbaxy executives who received marching orders include Indrajit Banerjee, the company president and chief financial officer, Yugal Sikri, country head (India) Ranbaxy; Maninder Singh, vice president of marketing; Govind Jaju, global head of sourcing and Ratul Bahaduri, the director of finance. Sun Pharma, based in Mumbai, acquired Ranbaxy for $3.2 billion from Daiichi Sankyo, Inc. in 2014.

Despite the management shakeup at Cipla Ltd.. the company submitted a first-round offer for UCB’s Kremers Urban Pharmaceuticals Inc. unit, valued at $1 billion, in late April

Last year Cipla took aim at Swiss-based Novartis, asking the Indian government to revoke five patents Novartis AG holds on respiratory drug Onbrez, because the company has been depriving 99.9 percent of the patient population in India who need the drug.

Cipla took issue with the fact that Novartis pledged in 2008 to make and distribute the drug locally, but instead has only imported around 54,000 annually—or about 1 percent of the amount needed for treatment.

In the summer of 2014 Cipla launched its asthma medicine Serroflo, a Salmeterol/Fluticasone combination, in Europe.

Cipla’s war with Novartis began last October, when it said it believed it was perfectly capable of manufacturing Onbrez itself. "Cipla believes that it has the potential to manufacture adequate quantities of the drug and make the same available in the country," the company said in a statement.

Onbrez (indicaterol) is used as a therapy for chronic obstructive pulmonary disease (COPD), from which Cipla says more than 15 million Indians suffer.

India’s fourth-largest drugmaker by revenue also asked India’s Department of Industrial Policy & Promotion to cancel the patents under Section 66 of the Indian Patents Act.

That section has been controversial with international biotech firms, because it grants the Indian government the power to revoke a patent in the public interest. Patent holders are given a chance to defend their rights to the drug—which could mean a protracted legal battle is in the works between Cipla and Novartis.

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