Natco readies for windfall gain after US FDA okays Copaxone copies

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26 Aug, 2025 12:21

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Moneycontrol News
Shares of Natco Pharma soared 20 percent on Wednesday with its partner US generic major Mylan announcing that it had receiving US FDA approval for the generic version of Israel-based Teva’s top-selling multiple sclerosis (MS) drug Copaxone 20 and 40 mg/mL dosage forms.

Mylan said that the 40 mg/mL generic version of Copaxone may be eligible for 180 days marketing exclusivity as it was one of the first applicants to submit a substantially complete Abbreviated New Drug Application (ANDA).

The US FDA hasn’t yet made a formal determination on exclusivity.

Mylan had missed out on approvals twice this year, and investors assumed there would be a further delay, but all that changed on Wednesday.

There is a lot at stake for Mylan and Natco from generic Copaxone approval.

Copaxone is the most prescribed MS treatment for relapsing forms of MS (Multiple sclerosis) in the United States with brand sales for the 20 mg/mL dose of approximately USD 700 million and for the 40 mg/mL dose of approximately USD 3.64 billion for the 12 months ending July 31, 2017, according to QuintilesIMS.

Copaxone alone contributed a fifth of Israeli drug maker Teva's USD 21 billion sales in 2016 and nearly half of company’s profits.
Approximately, 400,000 individuals in the US have MS – a central nervous system, and relapsing MS accounts for 85 percent of initial MS diagnoses.

“It was a good complex generic to get (approval),” said Rajeev Nannapaneni, Vice Chairman and Chief Executive Officer of Hyderavad-based Natco Pharma to Moneycontrol over phone.

Nannapaneni declined to share further details saying that the launch plans for both products will be communicated shortly after concurring with Mylan.

Natco has teamed up with US generic major Mylan for the two dosage versions of Copaxone generically known as glatiramer acetate injection. As per the agreement Natco will supply the drug, while Mylan markets it in the US.

Natco will receive 30 percent profit share from Mylan for the 20 mg product and 50 percent share for the 40 mg product.

The much anticipated approval has the potential to generate a massive windfall to the company. Even by conservative estimates analysts expect Natco to rake in profits in excess of Rs 1000 crore from the two generic versions in the coming quarters.

“We were expecting launch (of 20 mg product) in Q4 FY18 (Jan-Mar) with USD11 million of revenue (for Natco) in FY18. Given the earlier-than-expected launch, this could now contribute USD 25 million-USD 30 million in FY18 and around USD55 million in FY19,” Edelweiss said in a note.
“For the 40 mg product, the launch is likely to be in the second half of fiscal year 2018-19 due to certain patent issues. This product could contribute USD 125 million to Natco’s revenue in FY19 and USD 250 million in FY20,” the note added.

Momenta Pharmaceuticals and Sandoz, the generic unit of Swiss pharma major Novartis have secured FDA approval for their generic version of Copaxone 20 mg.

However, Momenta-Sandoz combine failed to make much impact as Teva succeeded in switching many patients to the thrice-a-weekly treatment with 40 mg version from the original version consisting of 20 milligrams taken every day.

"Copaxone 20 mg launch maybe imminent but the 40 mg launch is subject to litigation outcome,” said Vishal Manchanda of Nirmal Bang Institutional Equities to CNBC-TV18.

“So what Mylan can do is they can choose to launch at risk. If they choose to launch at risk, we see this as USD 200-300 million opportunities for them assuming no additional competitors enter by then," he added.

For Natco Pharma the approval of generic Copaxone reinforces the company’s strong product development capabilities. Copaxone is considered to be highly complex and difficult to replicate than most traditional generic drugs.

“The Copaxone approval is a major breakthrough not only for Natco Pharma but for Indian generic pharma industry,” Afzaal Mohammed, pharma analyst tracking Natco at Karvy Stock Broking said.

"Till date this is the most difficult generic drug," Mohammed said.

Natco Pharma makes the critical API of Copaxone, the formulation is done from Gland Pharma. Gland Pharma was acquired by China’s Shanghai Fosun Pharmaceuticals Group.

Natco ended FY17 with revenues of Rs 2078.9 crore and net profit of Rs 486.0 crore. The profit was largely due to the exclusivity the company had for generic Tamiflu drug in the US market. Natco makes much of its revenues through sale of cancer and hepatitis-C antiviral drugs in domestic formulation market.

In May this year Natco in partnership with Dr Reddy’s received approval from US FDA to launch anti-cancer drug doxorubicin hydrochloride liposome injection. Sold under brand name Doxil - doxorubicin is one of the most complex drugs to copy. Natco developed the product in-house. Interestingly, generic Doxil was a major product launch for Reddy’s in several quarters.