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Natco Pharma Expands Beyond Generics Amid Intensifying Competition
Natco Pharma has mainly made money by producing difficult generic medicines.
Generic medicines are lower-cost versions of drugs whose patents have expired.
Competition between Indian drug companies is now making this business harder to grow.
Natco bought almost half of Adcock Ingram, a major drug company in South Africa, to enter a broader market.
It plans to bring some of its own medicines to Adcock’s business.
Natco is also raising money to make more acquisitions.
Its sales and profits fell after the cancer drug Revlimid lost patent protection.
The company still wants to make complicated generic medicines, such as cancer treatments and biosimilars.
It is also making small investments in new drug technologies, including gene editing.
Natco Pharma acquired a 49% stake in South Africa’s Adcock Ingram for about ₹3,000 crore.
The company is using acquisitions and a planned ₹2,000 crore QIP to expand geographically and fund growth.
Natco’s first-quarter FY27 revenue fell 43% and net profit declined 57% after Revlimid lost exclusivity.
The company expects complex generics, including peptides, oncology drugs and biosimilars, to drive future earnings.
Natco has invested in drug discovery, including its cancer candidate NRC2694 and gene-editing company eGenesis.
- Who
- Natco Pharma, led by chief executive Rajeev Nannapaneni, and South African drugmaker Adcock Ingram.
- What
- Natco is diversifying beyond its traditional generic-drug business through an acquisition, new funding and investments in innovation.
- Where
- The expansion involves Natco’s Hyderabad-based business, South Africa and the United States, its traditional key market.
- When
- The key developments occurred from 2024 through August, including the Adcock investment in July 2025, the planned QIP in July, and an eGenesis investment announced on 25 August.
- Why
- Competition in generics is intensifying, growth is slowing and Natco is seeking more stable earnings and new growth opportunities.
Diversification and Innovation Case
Generics-Focused and Risk-Conscious Case
Expanding beyond the United States
Diversification and Innovation Case
Management says acquiring Adcock Ingram provides access to a broader South African portfolio and can reduce volatility by strengthening Natco’s base business.
Generics-Focused and Risk-Conscious Case
Analysts describe Natco as being in a transition after Revlimid’s loss of exclusivity, while the company’s new businesses may take two to three years to produce their full value.
Future of complex generics
Diversification and Innovation Case
Natco argues that difficult-to-make products such as peptides, oncology drugs and biosimilars can generate substantial earnings even with relatively few successes.
Generics-Focused and Risk-Conscious Case
Management says generics is consolidating and Indian companies are competing more fiercely, making sustained growth harder despite the potential of complex products.
Investing in drug discovery
Diversification and Innovation Case
Nannapaneni says small, calculated investments in areas such as CRISPR-Cas9 gene editing allow a mid-sized company to participate in innovation without putting its core business at risk.
Generics-Focused and Risk-Conscious Case
Drug discovery carries binary risks, including failure, and the article notes that a broader ecosystem is needed to absorb those risks.
Key facts
- Adcock Ingram stake
- Natco increased its holding to 49%, with total investment reported at ₹3,000 crore, approximately $315.4 million.
- Initial Adcock investment
- Natco acquired a 35.75% stake in July 2025 in a deal valued at $226 million.
- Planned fundraising
- Natco’s board approved a ₹2,000 crore qualified institutional placement to support further inorganic growth.
- First-quarter FY27 performance
- Revenue fell 43% year-on-year and net profit declined 57%, largely because Revlimid sales fell after loss of exclusivity.
- Future product focus
- Natco expects difficult-to-make generics, including peptides, oncology products and biosimilars, to provide much of the industry’s future earnings.
- Innovation investment
- Natco invested $14 million in eGenesis in August, following an $8 million investment in 2024.
- Cancer candidate
- Natco is developing NRC2694 for late-stage head and neck cancer.
Quotes
Rajeev Nannapaneni
Chief executive of Natco Pharma
“I think the value of Natco and Adcock's pipeline will come in the next two to three years, not today. So, we are playing the long haul… But Adcock also has a lot of meaningful strength to our base business”
livemint.com
“These complex (drugs) are harder to do. But even if you have less than five successes in a decade, it more than takes care of your earnings”
livemint.com
Sources
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