They did sell 14 acres earlier this year to microsoft for some 114 crores… So empirical evidence is there… Whether they have sold/disposed in earlier years since after the article was written I am not aware
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Natco has been fighting many of the patent protected drugs in India for domestic launches… most of them do not move the needle for domestic formulations business for Natco Pharma and only bring the cost down significantly for the patients.. Risdiplam as well, the number of patients needing the treatment is very less, thats why Roche has been able to price it the way it has, it is quite a rare disease in terms of volume of patients … and if Natco gets favourable judgement, the price at which it will market the drug will not make it earn anything significant in terms of its present market cap or annual sales..
more recently, the CTPR agro chem battle with FMC Corp is significant for the crop science division of Natco Pharma…
I was just thinking something aloud.. and wanted to put it here for broader discussion…this looming tariff thing that US may or may not impose on pharma imports from India.. how will it affect gRevlimid imports? Natco must be exporting at a predetermined cost + mark up formula (which is extremely low relative to the sale price of gRevlimid in USA) and it is the 30% profit share that get repatriated back to it .. therefore, tariff will only impact the import value and not profit share repatriation to it, isnt it? Tariff impact wont affect gRevlimid USA business for Natco in the current year is what I am concluding…due to most of the money coming from profit share
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Having a lumpy business of Natco pharma, what should be the mindframe of long term investor? It is roller coaster ride running parallel to the ground for few year. when will Roller coaster rides toward upward is very difficult to predict? I think for making money in Natco, one needs lot of luck with great patience. Both are must for Natco long term investor. Disclaimer: Holding and biased.
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I believe one has to look at it as a cyclical business, much more like a commodity like sugar or metals, where the classic cycle goes down for some time and then upticks, which in this case has been big opportunity drugs like Copaxone, Revlimid and Semaglutide/Ozempic in the coming years
One has to keep reasonable expectations from the company in terms of earnings for at least 1-1.5 because, anyway, post Mar 26, profits will be dented due to Revlimid, which has been a classic in NATCO’s story in the past until Ozempic or any other drug becomes a hit.
If you understand the business and are ready to wait for the next cycle (which has a defined tentative timeline if the approvals come on time, which has been pretty much the case in past), accumulating the stock at these levels is a decent opportunity in value terms, probably.
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Can you please throw some light on this? What would lead to this profit dent? Is there an expiry of some agreement or something like that that is set to happen?
Because the gRevlimid patent expiry will happen at that point in time, leading to massive price erosion due to the open market for other players to enter, impacting the company’s overall margins
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Race to semaglutide is going to start. It seems Dr Reddy and Zydus are heading the race. Natco seems to be not interested much as it’s not suit it’s business profile.
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