Won license to make one of Bayers product: Natco's CFO

Here is an edited script with an interview with CNBC-TV18.

Q: Have you been granted compulsory license to manufacture one of Bayer’s products? Any royalty payment involved?

A: Yes, we have been granted a compulsory license to manufacture one of Bayer’s products. The orders are just coming. It is subject to 6% royalty payment on net sales. This is the first time that the compulsory licensing provisions of the Patent Act have been made use of.

Q: Which is the drug that is involved? What is the size of the market of this drug?

A: The size must be around Rs 25-30 crore, of course subject to market arrangements.

Q: Just more details on this entire deal. What is the size and monetary gains for Natco Pharma post this?

A: Controller of Patents has given the order which is subject to certain conditions. As to the size at which we can sell the medicines, maintenance of regular accounts and other conditions that it will be manufactured only at our facility that is non-exclusive or non-assignable.

Q: Do you expect an annual revenue of  Rs 25-30 crore? What is the margins on the product?

A:  We cannot disclose margins at this point of time but they are fair enough.

Q: Were you expecting royalty payment of 6%?

A: Yes, it’s in line with our expectations.

Q: Cipla also won this case? Is that what you are hearing as well?

A: As per the order, it pertains only to Natco Pharma.

Q: Cipla is not involved in this? Will Bayer go ahead and litigate or is this the final judgment?

A: No, there is no finality on these issues because one can always question on several issues that are involved in the judgment. It is a big judgment running into 60 pages. I don’t think we can comment on that at this stage.

Q: Which are the other companies that are involved in the judgment?

A: Only, Natco Pharma.