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Analysts say the US FDA approval for copaxone’s generic version will boost Natco Pharma’s earnings significantly as the market size of the drug is huge and Mylan could get a 180-day exclusivity, albeit a shared one. Photo: Reuters (Reuters)
Analysts say the US FDA approval for copaxone’s generic version will boost Natco Pharma’s earnings significantly as the market size of the drug is huge and Mylan could get a 180-day exclusivity, albeit a shared one. Photo: Reuters (Reuters)

Natco Pharma shares surge on FDA nod to Mylan’s drug

Natco Pharma shares hit the upper circuit of 20% as its partner Mylan received US FDA approval for the generic version of multiple sclerosis drug copaxone

Mumbai: Natco Pharma Ltd on Wednesday said its partner Mylan NV has received approval from the US Food and Drug Administration (FDA) for selling the generic version of multiple sclerosis drug copaxone in two strengths, which has a combined market size of more than $4 billion.

Analysts say this approval will boost Natco Pharma’s earnings significantly as the market size of the drug is huge and Mylan could get a 180-day exclusivity, albeit a shared one.

Shares of the Hyderabad-based firm rose to a maximum daily limit of 20% at Rs954.35 on the BSE, while benchmark Sensex gained 0.55% at 31,671.71 points. Natco Pharma’s stock has surged 65% so far since 1 January.

Mylan announced late on Tuesday that it has got the US FDA’s approval for the generic version of Teva Pharmaceuticals’ copaxone injection in 20 mg/mL and 40 mg/mL strengths.

“Currently, there are no outstanding patents/litigations on the 20mg formulation. As a result, Mylan could launch it immediately. However, as there is ongoing litigation on the 40mg formulation, it will be an at-risk launch till all outstanding issues are settled. We expect Mylan to clarify its stance on the potential 40mg at-risk launch shortly," said Nitin Agarwal, analyst at IDFC Securities, in a note on Wednesday. Copaxone is the most prescribed medicine for multiple sclerosis in the US, with brand sales of about $700 million for 20 mg/mL dose and $3.64 billion for 40 mg/mL dose in the 12 months ending July, according to data from global healthcare information provider QuintilesIMS.

Mylan said in its press release that it was one of the first applicants to submit a substantially complete abbreviated new drug application (ANDA) for copaxone generic, and hence, the company and other first filers may be eligible for 180 days of generic drug exclusivity in the US, though the FDA has not made a formal determination on exclusivity yet. “The approval for generic of Copaxone 20mg/40mg is a major positive for Natco as it vindicates its R&D capabilities besides boosting earnings for FY18-19E. With its cutting-edge R&D capabilities reflected in its niche value ANDA portfolio, Natco is one of the most promising mid-cap pharma players in India," Agarwal said.

Broking firm Edelweiss Securities said in a note on Wednesday that as per the agreement with Mylan, Natco will receive 30% profit share from the US company for the 20 mg product and 50% share for the 40 mg product.

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