Natco Pharma’s latest announcement isn’t just about slashing drug prices—it could redefine how investors value the stock.

The Hyderabad-based generics company said it plans to launch Risdiplam, a generic of Roche’s Evrysdi, for ₹15,900 in India. That’s not a typo: it undercuts the ₹18 million annual cost of the branded version by more than 99.9%. While the drug hasn’t yet hit the market, the Delhi High Court has ordered a status quo pending patent litigation, and Natco has already signalled a strategic pivot.

This isn’t Natco’s first run-in with big pharma over IP. The patent on Risdiplam is valid until 2035, and Roche has aggressively defended its exclusivity. In March, the Delhi High Court refused to grant an interim injunction, citing the overwhelming public interest in affordable treatment. Roche has appealed, and the court has ordered both sides to maintain the status quo until the next hearing on April 10. Legal uncertainty remains, but Natco has made its intentions clear—it is willing to take calculated risks in complex, high-impact areas.

What’s different this time is the nature of the product. Risdiplam is used to treat spinal muscular atrophy, a rare and life-threatening genetic disorder in children. The drug stimulates the production of a critical protein the body fails to make on its own. It’s not a commodity molecule—it’s a complex molecule, and reproducing it requires serious technical muscle.

That makes Risdiplam a litmus test for Natco’s evolution. Traditional generics are a margin game: race to the bottom, fight for volume. Biologics are different. They demand intricate cell-line development, regulatory precision and long lead times. Few Indian companies have pulled this off without leaning heavily on licensing deals or global partners.

Spinal muscular atrophy affects only a few thousand patients in India, but the treatment gap is enormous. With global options like Spinraza and Zolgensma priced far beyond reach, Natco’s ultra-low pricing for Risdiplam is a bold commercial bet with significant societal upside.

Natco is attempting to go it alone—and investors should pay attention. The company’s pivot toward “difficult” generics offers higher pricing power than traditional knockoffs, without the billion-dollar R&D burn of an innovator. If Natco can scale this model, it could secure a rare spot in the middle of the pharma barbell: low-cost manufacturing paired with technical credibility.

Its valuation suggests the market hasn’t caught up. Natco trades at a price-to-earnings ratio of just 7.4—well below Biocon’s 47.9, Lupin’s 31.7, and Zydus’s 19.1, all of which have made much of their biosimilar ambitions. Natco has been quieter but more targeted.

Companies like Biocon and Dr. Reddy’s have spent years building biosimilar pipelines and courting global markets. Natco has kept a lower profile—but with fewer distractions and sharper focus. Its leaner balance sheet and domestic market orientation may yet prove to be strengths rather than constraints.

For a stock trading at barely 7.4 times earnings—even a modest success in Risdiplam could reset the narrative. The ₹15,900 sticker price might sound like a giveaway. The real premium, though, could be in the multiple.