Event update: Natco Pharma (Outperformer) - Another blockbuster FTF ANDA filing adds to medium term visibility
Event
Natco Pharma has announced that, in partnership with Alvogen, it has filed the P-IV challenge on Ibtrutinib tablets (brand name – Imbruvica) across all strengths – 140mg, 280mg, 420mg and 560mg
Key Highlights
- Notably, while multiple players have filed P-IV ANDA challenge for Imbruvica capsules and have shared exclusivity for the same, Natco- Alvogen have been the first and likely only to file the P-IV challenge on the much bigger Imbruvica tablet formulation in Nov / Dec 2018. This should entitle them to potential 180 day exclusivity upon launch.
- Imbruvica has multiple OB listed patents protecting lasting through 2033-34 including the compound patent expiring in Dec 2026. We estimate that Natco should be able to launch the drug post compound patent expiry in 2026 as the subsequent patents are unlikely to hold up.
- Imbruvica is one of the bestselling / fastest growing oncology drugs in the US market currently used for the treatment of CLL (Chronic Lymphocytic Leukaemia). It is marketed by Abbvie and J&J jointly in the US and currently has annualized sales of ~$3bn in the US; 9mCY18 sales in US have grown 37% yoy.
- Abbvie estimates peak sales to cross $7bn with a bulk of them originating in the US; This implies that peak US sales could be ~$6bn when the patent expires in 2026
- Assuming ~$5-6bn sales for Imbruvica tablets upon expiration in Dec2026 (FY27), the 6months exclusivity could be worth $300-350m in PBT for Natco (50% price erosion, 50% mkt share and 50% profit share).
Valuation and View
Post big ticket generic wins (launches / filings) of gCopaxone, gTamiflu and gRevlimid, this FTF filing yet again underlines the capability of the Natco mgt team to generate unexpected winners by leveraging its unconventional business thought process. While there is no near term financial impact, we believe that this filing is strategically important as it helps to partially address investor concerns on Natco’s prospects post Revlimid and adds comfort on management’s ability to create new and meaningful growth drivers in the coming years. Also from an earnings perspective, given that Natco is pretty optimistic on its earnings growth outlook over FY22-24 driven by launches of gRevlimid, gNexavar and gEverolimus etc, this P-IV filing further enhances the medium to long term growth visibility of the company up the earnings momentum over the next 3-5 years. Maintain Outperformer.
Natco Pharma Limited is a pharmaceutical company. The Company is engaged in developing, manufacturing and marketing finished dosage formulations (FDF) and active pharmaceutical ingredients (APIs). The Company's segments include active pharmaceuticals ingredient, finished dosage formulations, job works, pharmacy and others. The Company's product categories include Domestic Formulations, International Formulations, API's and Blockbusters. The Company's products include Alphalan, Bandrone, Bendit, Clokeran, Lenalid, Thioplan, Anastronat, Capnat, Fulvenat, Kabanat, Natdox-LP, Rapact, Temonat, X-Trant, Glatimer, Hepcinat, Natdac, Natzold, Tigi, Alprazolam, Chloroquine Phosphate, Lansoprazole, Letrozole, Granisetron, Rizatriptan IR, Imatinib, Salmeterol Xinafoate, Sertraline Form I, Ibandronate Sodium Monohydrate, Pantoprazole Sodium Sesquihydrate, Ondansetron Hydrochloride (Injectable Grade), Daclatasvir and Glatiramer Acetate. The Company manufactures over 20 products under contract.
IDFC Securities Ltd., a subsidiary of the Infrastructure Development Finance Company (IDFC) wherein the Government of India holds a 20% interest, is India's leading equities broker catering to most of the prominent financial institutions, both foreign and domestic investing in Indian equities. A research team of experienced and dedicated experts ensures the flow of critically investigated stock ideas and portfolio strategies for our clients. Our coverage spans across various growth sectors such as agriculture, automobiles, Consumer Goods, Technology, Healthcare, Infrastructure, Media, Power, Real Estate, Telecom, Capital Goods, Logistics, Cement amongst other sectors. Our clients value us for our strong research-led investment ideas, superior client servicing track record and exceptional execution skills.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.