India's Natco to acquire US firm Dash Pharma

Hyderabad, India-based Natco Pharma (BSE: 524816) is to acquire Dash Pharmaceuticals, a front-end pharmaceutical sales, marketing and distribution entity based in New Jersey, USA, with net sales of $15 million expected for the year ending December 2021.

The $18 million deal is expected to be concluded by January 2022, and gives Natco a front-end to engage with its customers directly in the USA.

The move appears to be triggered by the severe price erosion in the US market, which some analysts argue is leaving companies with no surplus, and is largely on account of the nature of the hyper competitive generic drugs business.

Natco hopes the acquisition will help make a fundamental change in its business model and that the tweaked business model will help add girth to growth.

From being a backend research partner relying on a de-risked profit sharing model, the company is now emerging like other generic firms. Rajeev Nannapaneni, vice chairman and chief executive of Natco Pharma, points out that it is not a complete change of model though it does involve some amount of pivoting as the company continues to partner for complex generics, but continues to dabble in plain vanilla generics on its own.

Means more capital commitment