Natco Pharma and Alvogen settle patent infringement suit over Tamiflu ; stocks up by 2 per cent

Natco Pharma and US based drugmaker Alvogen, who have partnered on the first Abbreviated New Drug Application (ANDA) containing a para IV certification filed with the US Food and Drug Administration for generic version of Tamiflu oral capsules (oseltamivir phosphate) have settled the patent infringement suit filed by Gilead Sciences, Hoffmann-La Roche, F. Hoffmann-La Roche and Genentech filed in New Jersey District Court.

The FDA granted tentative approval for the generic oseltamivir phosphate capsules in March 2014. Under the terms of the settlement, Alvogen will be able to market oseltamivir phosphate capsules before expiration of pediatric exclusivity period, which is February 23, 2017, they said in a filing.

Tamiflu is used for the treatment of acute, uncomplicated illness due to influenza infection in patients.Tamiflu was developed by Gilead, and receives royalties on the drug's sale from Roche and Genentech.

According to US FDA, tamiflu drugs are a top prescribing specialty drug, Approximately 20.2 million prescriptions were dispensed and 18.1 million patients received a prescription for Oseltamivir in the United States by the end of year 2011. Tamiflu had US sales of around $495 million for the 12 months ended September 2013, according US healthcare information provider IMS Health. Tamiflu global sales were USD 700 million as of 2013 which is growing at close to double digits. Patent settlement is a big positive for the company as it would provide them with immense opportunity to sell their generic version in the United States and other global markets.

The Company posted a muted set of Q2FY16 numbers as sales grew by 7.15 per cent Y-O-Y from Rs 219.23 crore Rs 234.9 crores. The Company's EBITDA declined by 0.60 per cent weighed down by increase in expenses and slow growth in sales. The margins saw a contraction of 194 basis points Y-O-Y.PAT declined by 8.65 per cent Y-O-Y whereas sequentially profits saw an uptick as it rose by 4.75 per cent.

The shares of Natco Pharma rose to about 2 per cent to hit a intra-day high of Rs 543 on this news. Companies shares have been on a downward trajectory since the stock split with a negative returns of close to 8 per cent. In recent days the company's Chennai operations had to be shut due to heavy rains and subsequent flooding. The Chennai Unit manufactures oncology related API's. The Company's total loss due to shutting down of operations is yet to be assessed.

Natco Pharma Limited is an Indian Pharmaceutical Enterprise. The operations of the company are in four segments viz bulk chemicals, formulations, job work and others. The products of the company are seggregated further into pharma and oncology ( haemotology and solid tumors).