Little strange to see not much of discussion while couple of interesting updates are just round the corner (should I use the word 'inflection point" to make it more appealing).
Nevertheless, in continuation to previous write up, have attempted to dive a little deeper into Natco's near future (till 2020) launch pipeline to weigh Natco's standing in the race. Key areas being covered are: competition landscape and current progress of Natco on the that particular drug, market potential, management guidelines etc.
FY'18 Launch/Traction (most likely):
* gEntocort: Market Size (in USD):370.58 M
1. Mylan approval in 05/16/2011
2. Barr got approval in 2014.
3. Myne has already launched in April'16
4. Natco + Alvogen got approval on 23/11/2016.
5. Appco got approval on 04/07/2017
This his was a Para 3 filling. Got approval in Nov'16 and has been launched in partnership with Alvogen. As per Q3 concall, this was a soft launch per say as they were not able to stock properly. Proper marketing to reflect in Q4,17. Competition catching up as Appco has also joined the party.
gNuvigil Market Size (in USD) is 482.11 M.
1. Mylan approval on 06/01/2012
2. Lupin and Natco both got approval on 29th Nov. 2016. (are not marketing partners on this, will compete against each other)
Launched with Breckenridge Pharma. Key limitation, Natco has been approved in 50 mg, 150 mg, and 250 mg doses strength only which means missing on 100 mg and 200 mg strength. Likewise, Lupin is also missing approval for some doses strength.
To overcome these missing links Natco has entered in agreement with innovator Cephalon to market 100 mg and 200 mg as well. Per last. concall, Natco had a soft launch. Numbers to kick in the Q4 results.
- gTracellar: Market Size (in Mil USD): 487.5 M
1. Orphan drug wih REMS
2. No generic approval yet
3. Alambic has a DMF
Para 3 filling. Not launched yet. Sole exclusivity. As per con call, Rajeev mentioned that this is expected to reflect in early FY18 numbers. Alambic has a DMF, worth evaluating if they have any near future plans on this.
gVidaza: Market Size (in Mil USD):238.63 M
1. DRL approval on 09/16/2013
2. Mylan approval on 04/28/2016
3. Shilpa approval on 09/29/2016
4. Actavis approval on 04/29/2016
Para 3 filling. In con call it was mentioned that they have received CRL from FDA which was responded recently, expected to be launched FY2018.
gDoxil: Market Size (in USD) is 482.11 M.
1. Sun got a compulsory licency under name Lipodox,
Not approved for Natco yet. Is a complex generic. High FDA inspection for Injection therapy. Last year one FDA inspection was triggered primarily due to this generic. Will be a limited competition ground.
FY2019 launch projection:
- gCopaxon 40mg: Market size (USD M): 4349 M
Real big opportunity for Natco and lot is riding on Copaxon for Natco + Mylan. Interesting to see Tevas safe harbor statements around Copaxon even on any of the press release which may not been even remotely related to Copaxon.
1. Sandoz + Momenta: Sandoz has approval for 20 Mg by the name of GLATOPA since 04/16/2015. This 20 mg makes things comparatively lot easier for any aspirants once the legal issue around patent is shorted out. So, to me they have edge.
2. DRL + Synthon: Are also aspiring for this opportunity. May face issues with recent FDA issue at DRL Srikakulam facility.
Currently waiting for 20 MG approval. Have already answered FDA query which were primarily related to characterization data package. Partner Mylan to decide about at-risk launch in case of favorable verdict on May'17.
FY2020 launch projection:
gGleevec: Market size USD: 2375 M
1. Sun approval on 12/03/2015.
2. Appotex approval on 08/17/2016
3. Teva approval on 08/04/2016
Sun has already launched since Feb'16. Teva & Appotex since Aug'16.
Orphan drug status.To be launched in partnership with Lupin. Not approved yet.
gGilenya: Market size in USD: 1765 M
This one is going to be little crowded. though the market run rate is good for this drug but glad that management is not pinning too much hope on this.
may be shared exclusivity, had received the CRL which was responded recently (to Q3 call).
gTreanda: Market size USD: 709.7 M:
HOSPIRA, GLENMARK, BRECKENRIDGE ,INNOPHARMA, ACCORD, EAGLE
First to file. Pursuant to the settlement of the Paragraph IV litigation, NATCO plans to launch this drug on November 1, 2019, or earlier under certain circumstances.
2020 and beyond (current visibility):
key call out: As per settlement clause with Celgene, this mother of all opportunities Revlimid can be launched much ahead of limited quantity launch commencing 2022. Read somewhere that this could be as early as 2019 depending on other players making a move.
Overall, my impression is that Natco is not going to be number heavy in terms of ANDA filling/approval etc- unlike other industry players. There seems to be conscious effort of selective launches (limited in numbers) with well chosen areas of no or limited competition with reasonable to huge market potential. Within those selective launches they have couple of real BIG opportunities lined up over next few years which will work as great accelerator for company. Will be interesting to see how this unfolds.
Other word of caution (just in case needed), current valuation may look reasonable on PE multiples as compared to historical PE commanded by Natco. However those are more of optical. Please understand that earning got a booster dose recently due to gTamiflue (oseltamivir phosphate) exclusivity. previous reported trailing 12 months EPS was INR 22. I still hazard a guess to assign ~16 INR to base business (ex Tamiflue).
Will be great if others tracking this counter or pharma sector closely come out to carry this discussion forward. As always, diverse thinking makes for a better decision.
Have invested in this stock within last ~2 months.
Please do own due diligence before making any investment decision.