Natco Pharma gains after marketing partner wins patent case

Natco Pharma gained 4.7% to Rs 686 at 15:00 IST on BSE after a favourable ruling by the US Patent and Trademark Office for its marketing partner, Mylan NV, invalidating two of Teva Pharmaceutical Industries' patents.

The announcement was made during market hours today, 5 August 2016.

Meanwhile, the BSE Sensex was down 147.68 points, or 0.5%, to 27,920.22.

High volumes were witnessed on the counter. On BSE, so far 1.91 lakh shares were traded in the counter, compared with average daily volume of 70,932 shares in the past one quarter. The stock hit high of Rs 703.95, which is a record high for the stock. The stock hit a low of Rs 661.40 so far during the day. The stock hit a 52-week low of Rs 390 on 29 March 2016. The stock had outperformed the market over the past one month till 24 August 2016, gaining 9.93% compared with 0.92% rise in the Sensex. The scrip had also outperformed the market in past one quarter, gaining 46.46% as against Sensex's 10.88% rise.

The large-cap company has equity capital of Rs 34.83 crore. Face value per share is Rs 2.

Natco Pharma announced that the US Patent and Trademark Office (PTO) has ruled in favour of its marketing partner, Mylan NV, in its inter partes review (IPR) proceeding against Teva Pharmaceutical Industries and found all claims of two related Copaxone 40 mg/mL patents to be unpatentable. The two US patents were owned by Yeda Research & Development Co., Ltd. and licensed to Teva Pharmaceutical Industries Ltd. A decision by the PTAB on Mylan's third petition seeking inter partes review of another patent is expected on or before 1 September 2016.

On 15 August 2016, the PTO's Patent Trial and Appeal Board (PTAB) found Mylan's application against a fourth Copaxone 40 mg/mL patent, ineligible for post-grant review for procedural reasons. However, Mylan believes that today's favourable ruling in the IPR against these two patents strongly undermines that patent as well. As such, Mylan will proceed with pursuing all avenues to challenge that patent.

Natco's marketing partner, Mylan has filed a substantially complete abbreviated new drug application containing a Paragraph IV certification for a three times per week Glatiramer Acetate Injection 40 mg/mL, and expects to be eligible for 180 days of marketing exclusivity in the US upon final FDA approval. Copaxone 40 mg/mL had US sales of approximately $3.3 billion for the 12 months ending 30 June 2016, according to IMS Health.

Separately, Natco Pharma announced during market hours today, 5 August 2016, receipt of successful Establishment Inspection Report (EIR) from the US Food and Drug Administration (FDA) for the inspection conducted, during the period 8 February to 12 February 2016, at its chemical division in Chennai.

Natco Pharma's consolidated net profit rose 69.8% to Rs 47.65 crore on 38% rise in net sales to Rs 297.71 crore in Q1 June 2016 over Q1 June 2015.

Natco Pharma manufactures generic dosage forms, bulk actives and intermediates for the Indian and international markets.

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