Wednesday, June 8, 2011

52-WEEK BLOCKBUSTER: NATCO PHARMA

The Natco Pharma (Dr.V.C.Nannapaneni, Chairman) stock has outperformed the BSE Health Care Index by a huge margin last year. The company, which manufactures formulations, APIs and offers contract research and manufacturing services, is also a leading player in the oncology therapeutic segment, and derives a considerable portion of its revenues from it. Natco is also among the largest contract manufacturers in India, and has well-known pharma companies such as Ranbaxy and Dr Reddy's as its clients.

The US market (including US retail business) also makes a key segment for Natco. So far, Natco has filed 18 ANDAs, has received approvals for five drug applications and launched three products; three filings enjoy a Para IV certification. It has mitigated the risks of operating in this segment by opting for a partnership model. It has tied with US-based Mylan Inc for Glatiramer Acetate, a generic version of Teva's CopaxoneR, used to treat multiple sclerosis. It has also tied-up with Lupin (Lanthanum Carbonate tablets), Watson Pharma (Revlimid) and Dr Reddy's (for value-added generic oncology drugs). These add a lot of weight to its growth potential. In a first such move, Natco has also sought a voluntary license from Pfizer to make and sell copies of the latter's HIV medicine in India.
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