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Natco in focus ahead of Q4 numbers, to benefit from delay in Dr. Reddy’s gCopaxone

The delay in Dr. Reddy’s gCopaxone will benefit Natco as it launched the drug in October 2017 and has only one generic competitor in this product category.

Natco Pharma gained 5% in the opening hour trades today on the back of news that Dr. Reddy’s gCopaxone will get delayed further (read Dr. Reddy’s Q4 result and concall notes). This leaves the gCopaxone competition limited to only two players i.e. Sandoz and Natco’s partner Mylan.

Natco’s partner Mylan launched gCopaxone 20mg and 40mg in Q3FY18, while Sandoz launched its own version in Q4FY18. Dr. Reddy’s copycat Copaxone was likely to hit in FY19E but due to the delay, the launch has been now moved to FY20E.

The Copaxone 20/40mg franchisee is worth more than $4bn in the US and it is learned that Mylan has gained ~15% market share. While Teva, its innovator, still holds strong market share, it is expected to drop going ahead and Natco/Mylan and Sandoz will be able to gain market share further.

Natco is also expected to reports its Q4 earnings today. Natco’s PAT is expected at Rs295cr due to delay in Strides Shasun’s gTamiflu approval and full impact of gCopaxone in the quarter.

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