The launch of its generic viral flu medicine in the US, and its oncology & hepatitis C portfolio products in India brought Natco much success last year
During the financial year 2016-17, Natco Pharma became the first player to launch the generic version of Oseltamivir, a viral flu medicine, in the US market, creating a milestone for the industry. In the same year, the company’s oncology and hepatitis C portfolio products gained further strength in the Indian market.
“We saw an accelerated growth during the financial year due to Hepatitis C product growth in India and blockbuster launch of generic Oseltamivir in the US,” said Rajeev Nannapaneni, vice-chairman and CEO of Natco Pharma in the annual report of 2016-17 fiscal. “In formulations, new product sales have shown very good momentum and have improved total sales revenue significantly,” he added.
Going ahead, the company is looking at expanding its footprint in India and making significant investment in R&D. “Our business is driven by the scientific expertise of our R&D team and it forms the pillar of our product development capabilities,” said Nannapaneni, who joined the company in 2000. Currently 6-8 per cent of the company’s turnover is invested towards R&D each year.
In FY16-17, Natco Pharma’s revenue stood at Rs 20,789 million, its profit after tax (after minority interest) at Rs 4,860 million and its net worth was Rs 16,493 million.
Today, Natco Pharma is a leading player in India’s oncology segment with 28 active brands. Its flagship brands include Geftinat, Erlonat, Veenat and Sorafenat. The company has also heralded a new beginning in the gastro-hepatology therapy segment. Last year, it forayed into a new therapy segment by launching a Cardiology and Diabetology division.
“We are foraying into this segment with a clear objective to align it with our brand promise of offering well-focused niche products to consumers. We at Natco are encouraged by the growth opportunities the segment has to offer for specialised molecules,” said Nannapaneni. The product launches in the Hepatitis C basket have in fact helped the company gain a leading share of the market in India. The company’s consolidated revenue in FY16- 17 from Hepatitis C products grew to Rs 5,130 million, as opposed to Rs 3,412 million in FY15-16.
Globally, its products reach over 40 countries including North America, Latin America, Asia Pacific, South East Asia and Middle East.
As the US business landscape is facing challenges in the form of higher regulatory requirements, unfavourable pricing environment, intense competition and threat of new entrants, the company is looking to drive its long-term sustainability by enhancing its business opportunities in India and emerging markets. This is a part of its de-risking strategy.
Natco’s journey to enter the US and other key global markets started only about a decade ago. “We are cognisant of the immense growth opportunity that the domestic market can offer us to build a stronger financial profile,” said Nannapaneni adding that the company is looking to build its domestic capacities over the next few months.
With India’s economic prosperity improving, drug affordability and penetration of healthcare products and facilities will witness a boom. According to IMS Health and AIOCD AWACS, the industry’s revenue is expected to grow by 10-12 per cent CAGR over the next few years.
Natco Pharma was incorporated in Hyderabad in 1981 with an initial investment of Rs 3.3 million. The company today has seven manufacturing facilities spread across the country.