Facing headwinds in US, Natco Pharma looks to scale up biz in China

Natco Pharma is focusing on filing of cancer treatment drugs in China, the world's second largest pharmaceutical market, as part of its strategy to diversify business in various emerging markets amid headwinds in the US.

Addressing shareholders in the company's Annual Report for 2018-19, Natco Pharma Chairman and Managing Director V C Nannapaneni said the company had foreseen imminent headwinds in the US market and had began diversifying its resources towards building businesses in new markets.

Those investments are now reaping rewards, he added.

"We are currently investing to further establish our presence in Australia, Singapore, China and South East Asian countries and are confident that our businesses in these markets will propel growth in the future," Nannapaneni said.

In the near term, growth for the company would continue to be driven by markets like India, Brazil and Canada, he added.

"As we continually balance our portfolio of products and growth in the US, we expect majority of revenue to be coming from non-US markets," Nannapaneni said.

Commenting on the company's plans in the China market, he added that it is focusing on filing of oncology products in the country.

China is the second largest pharmaceutical market globally with total spending of USD 137 billion in 2018. Government reforms to improve insurance access and recent upgrades in the hospital and primary care infrastructure have led to increase in spending on healthcare initiatives.

China's pharma market is likely to grow at 3-6 per cent to USD 140-170 billion by 2023 as against Brazil which is likely to grow at 5-8 per cent to USD 30-43 billion.

Nannapaneni also said the drug firm has also begun exploratory work for expansion into Africa.

"We believe that this will help us diversify further into new geographies for growth," he said.