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Natco Pharma Eyes China Market Amid Headwinds In the U.S. Market

Natco is focusing on filing of cancer treatment drugs in China, as part of its business diversification plan in emerging markets.

Natco Pharma is investing to further establish its presence in Australia, Singapore, China and South East Asian countries, says Chairman VC Nannapaneni. (Photographer: Brent Lewin/Bloomberg)
Natco Pharma is investing to further establish its presence in Australia, Singapore, China and South East Asian countries, says Chairman VC Nannapaneni. (Photographer: Brent Lewin/Bloomberg)

Natco Pharma Ltd. is focusing on filing of cancer treatment drugs in China, as part of its business diversification plan in various emerging markets amid headwinds in the U.S.

Addressing shareholders in the company's annual report for 2018-19, Natco Pharma Chairman and Managing Director VC Nannapaneni said the company had foreseen imminent headwinds in the U.S. market and began diversifying its resources towards building businesses in new markets.

Those investments are now reaping rewards, he added.

"We are currently investing to further establish our presence in Australia, Singapore, China and South East Asian countries and are confident that our businesses in these markets will propel growth in the future," said Nannapaneni.

In the near term, growth for the company would continue to be driven by markets like India, Brazil and Canada, the chairman said. "As we continually balance our portfolio of products and growth in the U.S., we expect majority of revenue to be coming from non-U.S. markets," Nannapaneni said.

Commenting on Natco Pharma's plans in China, Nannapaneni said the company is focusing on filing for oncology products in that country.

China is the world’s second largest pharma market with total spending of $137 billion in 2018. Government reforms to improve insurance access and recent upgrades in the hospital and primary care infrastructure have led to an increase in spending on healthcare initiatives.

China’s pharma market is likely to grow at 3-6 percent to $140-170 billion by 2023 as against Brazil, which is likely to grow at 5-8 percent to $30-43 billion.

Natco Pharma has also begun exploratory work for expansion into Africa. "We believe that this will help us diversify further into new geographies for growth," he said.