Natco wins compulsory license from Bayer for cancer drug

In a landmark judgement by India's Patent Office, Natco Pharma has won a compulsory license from Bayer for patent protected anti-cancer drug Nexavar, chemically known as Sorafenib. The license is valid till expiry of the patent in 2021.

Hyderabad-based Natco had filed an application for issue of compulsory license to manufacture a low-cost version of Nexavar.

Compulsory license allows a generic drug maker, Natco in this case, to manufacture and sell a copy of the innovator's drug, Bayer in this case, on paying a royalty.

"The compulsory license, first of its kind granted, enables Natco to sell the drug at a price not exceeding Rs 8,880 for a pack of 120 tablets (one month's therapy) as against Rs 284,428 being the cost of Nexavar sold by Bayer," it said. 

The order also makes it obligatory for Natco to supply the drug free of cost to at least 600 needy patients per year.

Natco will have to pay 6% royalty on sales to Bayer for the drug on a quarterly basis. Natco said royalty payment was in-line with expectations.

It is expecting revenue of Rs 25-30 crore per year, post this win over Bayer.

The judgement, however, doesn't give any details on Cipla, who was selling a copy of Nexavar at one-tenth Bayer's price.

Natco shares jumped on the announcement and were up 6.4% at Rs 315.20 in late afternoon trade on NSE.

Nachiket Kelkar
nachiket.kelkar@moneycontrol.com