Company is establishing a solid platform for rapid growth
Indian pharmaceutical companies are evolving and moving up the value chain through investments in complex technology driven drugs. Indian pharma majors have started to understand that generics are not the be-all and the end-all and that innovative drugs could show the way forward. Though Natco Pharma's story has been largely focused on Copaxone - its biggest opportunity so far - its cutting edge R&D capabilities have grown at a compound annual growth rate of 20% from 2006 to 2014.
The company's performance in the past year has been outstanding as a result of an evolving business model and increasing growth prospects for the next three years. Apart from a niche product pipeline in the US due for monetisation over the next 2-3 years, deals like Gilead’s Sovaldi are set to provide consistent cash flows.
Increasing probability of Copaxone, Revlimid and Tamiflu launches, and interesting filings in the oncology space in US and EU, have also helped Natco create a solid platform for rapid growth.
Natco Pharma is preparing to launch four to five new products in the US market by the end of next year, through what it terms a differentiated product pipeline of niche and complex generic products. As a result, the company is upgrading its existing manufacturing facilities in India with new product lines and R&D capabilities, while also expanding its formulation facility in Hyderabad.
The company has 36 ANDA (abbreviated new drug application) filings, including 15 Para IV filings with the US FDA. Some of them are first-to-file (FTF) applications targeting a combined market of US$15bn, and 14 approved ANDAs, including two tentative approvals.
Natco is looking to partner with other global pharma majors to develop and market products for the US. The company has entered into de-risked arrangements with marketing partners, wherein the partner would undertake the responsibility of complex litigation and regulatory issues and securing ANDA approval.
Meanwhile Glenmark is gearing up for complex generic opportunities, namely injectables, inhalers and biosimilars. The company is continuing to invest heavily in R&D over the next two to three years to build its pipeline of speciality products in niche segments. The company has begun working on complex generics including peptides.
Glenmark is to launch 10 to 12 products in the domestic market during the current fiscal year as it looks to increase focus on the Indian market across four key areas: dermatology, diabetes, cardiology and respiratory. India contributes 26% to total sales for the company, while the US accounts for 31% of revenues, its largest market. The company is also launching two drugs in the oncology segment by the end of this fiscal year.
R&D has been consistently growing as a percentage of net sales. From 5% in fiscal 2011, it grew to 7% in 2012, 8% in 2013, 20% in 2014 and 9% the following year.