Natco Pharma aims to diversify product portfolio in domestic market

Informing shareholders, the drug maker said its oncology segment suffered in the last financial year due to pricing controls from the government, and its Hepatitis-C business continued to decline due to reduction in market size.

Also, during the fourth quarter, the COVID-19 pandemic resulted in cancer patients postponing their hospital visits and chemotherapy procedures, the company said. All these factors collectively pushed the business to decline during the year, it added.

"We are planning for new product launches in the non-oncology segment to mitigate the impact of the Hepatitis-C market decline," Natco Pharma Chairman and Managing Director V C Nannapaneni said. Oncology continues to be the company's most important segment in the domestic market. Currently, it has 33 products in the cancer treatment drug segment.

In spite of these factors that caused the domestic business downturn, the drug maker launched eight products during the last financial year and continued to retain its market position in key segments, Nannapaneni said. On the domestic business front, the company is cautiously optimistic about its commercial foray of the crop health sciences division in the near future, he added. The company's domestic formulation sales in 2019-20 stood at Rs 540.5 crore and accounted for 27 per cent of the total revenues.

Commenting on the company's international business, Nannapaneni said it aims to focus more on markets like Canada and Brazil, which offer robust growth opportunities. "We have also made it a strategic priority to concentrate more of our efforts in the 'rest of the world' market to improve our revenues and profitability. We see good growth potential in Canada and Brazil going forward, among other markets," he noted.

The company continues to lay good foundation for business growth in the Asia-Pacific region, Nannapaneni said. Commenting on the company's US business, he said that in 2019-20, it remained strong despite pricing pressures and competition for its antiviral flu medicine Oseltamivir.

"We did not see any compliance issues for our facilities, which cater to international markets. "The company continued to file abbreviated new drug applications, some of which we believe to be first to file. We also observed a more stabilised pricing scenario in the US market," Nannapaneni said.

The firm remains bullish on its product pipeline for the next few years, including its blockbuster product Lenalidomide for the US that would catapult it to the next trajectory of growth, he added. Natco Pharma's international business in the last financial year stood at Rs 933.4 crore, contributing 46 per cent to its overall revenues that stood at Rs 2,022.4 crore.