Natco Pharma’s Partner Mylan Gets U.S. FDA Nod To Sell Multiple Sclerosis Drug Copaxone

Natco Pharma Ltd.'s partner Mylan NV said the U.S. Food and Drug Administration has allowed the company to launch the much awaited generic version of multiple sclerosis drug Copaxone in the American market.

Mylan got the approval for selling both 20 mg and 40 mg strengths, it said in a press release, adding that it may be eligible for 180-day exclusivity for the 40 mg version as it is the first patent filer for the drug.

Natco Pharma has partnered Mylan for the drug and will be manufacturing the formulations to be sold in the U.S. It will receive one-third of the sales revenue.

Shares of Natco Pharma hit the 20 percent upper circuit on the BSE, the steepest jump in more than four years, after the approval.

Copaxone is used for the treatment of patients with relapsing forms of multiple sclerosis (MS), a chronic inflammatory disease of the central nervous system. Mylan said that it will begin shipping the drug imminently.

The release stated that the 20-mg version has brand sales of $700 million while the 40 mg dose has a brand size of $3.64 billion. Mylan is the second generic to receive approval for the 20 mg drug, while it's the first generic to get approval for the 40 mg drug.

Here's what analysts said about the deal:

Equirus

Based on current market dynamics (two generic players market), Natco can make around $25 million in profit from the Copaxone 20-mg launch, brokering firm Equirus said.

“Assuming no additional generic approval in near term and a 40 mg at risk launch, Natco can make around $90-100 million; though this may vary depending on competition entry (there are around five other filers),” it wrote in a sales note to clients.

Motilal Oswal

“Assuming Mylan launches both the products and this becomes a 2-3 player market in the next 3-6 months, Mylan-Natco can generate sales of $350 million. The companies have not decided yet that they will launch at risk or they will wait for last patent invalidation,” Motilal Oswal said in a sales note to clients. Given that Srikakulam plant is expected to receive establishment inspection report soon, the brokerage expects Copaxone approval for Dr Reddy's Laboratories Ltd. in the next two-three quarters.

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Haitong

“We expect Mylan to book revenues of $300 million in FY19 end and $360 million in FY20 end, with around 30 percent market share. Natco's eventual share in the generic Copaxone would be a combination of cost and profit share from its partner Mylan, which we expect to be $115 million in FY19 end and $144 million in FY20 end, in revenues,” said Rakesh Nayudu, a pharmaceutical analyst at Haitong, in a note on Monday.