Natco Pharma Touches New High On Drug Approval 

Natco Pharma Ltd. rallied as much as 7 percent to an all-time high of Rs 650.90 after the company received regulatory approval to launch generic versions of flu treatment drug, Tamiflu, in the U.S. The stock was also buoyed by investment bank Jefferies’ decision to initiate coverage with a ‘buy’ recommendation.

Natco Pharma received final approval for its Abbreviated New Drug Application containing a paragraph IV certification from the U.S. Food and Drug Administration for generic versions of Tamiflu oral capsules, according to the company’s press release. A paragraph IV certification enables companies to market generic drugs for 180 days in the U.S.

Natco and its marketing partner Alvogen are the first generic players to receive this approval, the company added. Natco Pharma and Alvogen had settled a patent infringement suit in December 2015, under the terms of which, Alvogen will be able to market the oseltamivir phosphate capsules before February 23, 2017, the day the exclusivity period expires.

Tamiflu oral capsules had sales of approximately $403 million in the U.S. for twelve months ended December 2015, according to IMS Health data cited by Natco Pharma.

Jefferies Recommends ‘Buy’

Jefferies initiated coverage on Natco Pharma in its report dated August 3 with a ‘buy’ rating and a price target of Rs 730 per share. Jefferies sees an upside potential of about 15 percent for the stock on the back of key launches in the U.S., including Tamiflu.

Jefferies expects six key launches from Natco over the next 12-15 months from the company, on the back of which, the investment banking firm has estimated U.S. revenue growth of 10 times in the period between financial year 2015-16 to 2018-19.

Jefferies adds that Natco Pharma is one of the best positioned Indian generic players to face headwinds.