December 1, 2009 / 6:52 AM / 10 years ago

UPDATE 1-India's Cipla in generic supply talks with Pfizer

* No plans to sell stake in Cipla as part of pact - exec

* Global firms seeking low-cost producers

* Glaxo has pact with Dr Reddy’s for generic drugs

* Cipla shares rise as much as 3.6 percent (Adds details, share price)

By Bharghavi Nagaraju

MUMBAI, Dec 1 (Reuters) - Cipla Ltd (CIPL.BO) is in talks with a host of global drug makers, including Pfizer Inc (PFE.N), to supply generic products, a top official of the Indian drug maker said, sending its shares up more than 3 percent.

“Yes, we are talking to some companies,” Cipla’s joint managing director, Amar Lulla, said. “Nothing has been signed yet.”

He declined to give a timeline when a deal would be announced or a forecast for the revenue expectation from such a deal. Lulla denied a TV report Cipla may sell a stake as part of the drug supply pact.

At 12:06 p.m. (0636 GMT), shares in Cipla, which has a market value of $5.5 billion, was trading 2.7 percent higher at 328.70 rupees while the main Mumbai market .BSESN was nearly 1 percent. The stock had gained as much as 3.6 percent earlier.

Global drug makers such as GlaxoSmithKline (GSK.L) and Pfizer are increasingly looking to low-cost destinations like India to tie up supplies as they battle falling prices and increasing generic competition.

Demand for generic drugs from Indian producers such as Cipla, Dr Reddy’s Laboratories (REDY.BO) (RDY.N) and Ranbaxy Laboratories RANB.BO is booming as nations battle rising healthcare costs.

In June, Dr Reddy’s entered into a pact with GlaxoSmithKline under which Glaxo will get access to its drugs and supply them in emerging markets such as Africa, the Middle East, and Latin America. [ID:nLF635888]

Like other drugmakers, Pfizer is also grappling with growing risks of a slump in earnings on patent expirations over the next two years, coupled with rising regulatory and scientific hurdles for bringing next-generation drugs to the market. (Writing by Sumeet Chatterjee; Editing by Ranjit Gangadharan) ((sumeet.chatterjee@thomsonreuters.com; +91-80-3982 7450; Reuters Messaging: sumeet.chatterjee.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

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