Natco Pharma: Focusing On Complex Products

(Rajendra Badoni) #145

Thanks, stockcollector for giving a perspective and future prognosis.
I do also envisage no dent on business side. Hope this is a blip.

(sandriano) #146

hi stockcollector,

Do you know the reason for frequent equity dilution even though there is enough cash in the books?

Disc: No holdings

Roberto el S

(ruffles) #147

Seems great thumbs up for Natco business. Thanks a lot for sharing your views it has certainly helped me.

(Bhaskar Jain) #148

Many thanks for your note. If I may ask, how did you figure out his exit? I don’t see any bulk deal or announcement from the company. I do see his buy transaction in older bulk deals and in Dec end shareholding.

(stockcollector) #149

I don’t know the details of every equity raising. Numbers speak for themselves here - I don’t think equity has been diluted too much to the detriment of retail investors. Also at the same time reserves has increased quite considerably indicating that money has been invested profitably.

Their RoE increased only in the last 2-3 years. They were in the investment phase (R&D) prior to that and we are seeing the results of those investments only now. They raised 915 crores recently (not shown in the numbers above) which resulted in approx 5% dilution, promoter stake also came down from >50% to 48%. This cash is still not used and they have stated that the purpose is to invest in the development of new complex generics for India and the US.

I am not a numbers person. Let me try…
15,000 cr market cap. 800 cr cash in the bank, assume 200 cr accrual for copaxone/tamiflu from 01 January.

14,000 crore (excluding cash). Profit by end of year March 2018 = 700 crores. PE of 20 (excluding cash). Very cheap in my view.
Discl - accumulating, currently 25% of my portfolio

(ruffles) #150

In my experience P/E is just a number no body knows what P/E is correct or wrong for a company. People buy when they see good quarterly results and people sell when quarterly results are not good. There is no role of P/E. When results are good P/E increases just because people like the stock and buy more but not that they know what should be P/E of this company. Same goes for declining P/E due to slowing growth not because they know right P/E.

Let me know if people agree with my view.

(Gary) #151

You seem to have missed the price erosion in your calculation. Particularly given today’s environment in US.

Personally I think Natco will struggle to break free because there is no sustained large pipeline except a few blockbusters. See what has happened to Torrent after gNexium. [quote=“stockcollector, post:144, topic:5238”]
Lenalidomide will kick in from March 2022 - this is a huge opportunity! Lenalidomide market size in USA continues to increase and in 2018 the market size is probably 10 billion (guesstimate). 10% market share in 2022 will earn Natco 1 billion. Assume 50% profit share and let us assume 30% cost for materials and other expenses - 200 million profit (1300 crores in today’s exchange rate approx) and then gradual increase every year until 2026 and then…

(stockcollector) #152

Ruffles - agree with your comments!

Gary - Lenalidomide patent expiry is in 2026. Based on agreement with celgene, Natco will be able to sell 10% from 2022 with gradual escalation to 33% in 2025 and then from 2026 onwards unlimited quantities (from 2026 natco could be competing with celgene and other generic players as and when they enter). So there will not be price erosion before 2026!

(Gary) #153

And if I’m not wrong at least 5-6 people have already submitted ANDA for Revlimid. Dr Reddy’s, Cipla, zydus etc. And I think Dr Reddy’s is already under a lawsuit with Celgene. So, gains from this will be essentially limited.

(stockcollector) #154

Celgene will fight it. If Dr Reddy’s get a favorable verdict, then the above dates get accelerated!
I am aware of only Dr Reddy’s, no one else in the fray - I could be wrong here.

Alvogen also has challenged Celgene as of septemebr 2017.

(Sumeet Shah) #155

The competition for Copaxone now intensifies. Sandoz (division of Novartis), get US FDA approval for Glatopa 40 mg

(kauban) #156

Lot of insider buying since Jan 2018. Rajeev Nannapaneni bot ~ INR 15 lakhs worth of shares on 12th Feb.

(Ayush Mittal) #157

Zero observations in recent USFDA audit -

(ruffles) #158

15 lakhs worth of share is like penny. Nothing to make out of it.

(Rajesh) #159

Their relatives purchased Rs1.97 cr worth too.

(Sreeni) #160

Teva Pharma and Natco Pharma Submit ANDAs to the FDA Requesting Permission to Manufacture Generic Sovaldi, Argue Gilead’s Patents are Not Valid

(Growth_without Debt) #161

Any update? Please share.

(stockcollector) #162

Info from Mylan con call Re- copaxone. 14% market share and 18% of new prescriptions. Gaining patients every day.

(Sreeni) #163

Mylan rocking today due to upgrade by Morgan Stanley

(kauban) #164

when will copaxone start showing up in Natco’s revenues?