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COMPANY PROFLE - WOCKHARDT LIMITED
 


WOCKHARDT LIMITED company profile

BY OUR PHARMA CORRESPONDENT
May 17, 2006

Wockhardt Limited

One of the leading pharmaceutical companies from India, Wockhardt has been able to carve a niche in the glabal pharmaceutical landscape, as well. With an estimated market capitalization of more than US $ 1 billion, Wockhardt's annual turnover works up to US$ 285 million.

Currently, half of Wockhardt's revenue comes from Europe and the United States. Wockhardt’s market presence covers formulations, biopharmaceuticals, nutrition products, vaccines and active pharmaceutical ingredients (APIs).

Wockhardt Limited: Company Background

Promoted as Worli Chemicals by Khorakiwala family in 1959, the company was initially engaged in marketing of formulations. Wockhardt Pvt Ltd was established in 1973. In 1984, it merged with two synergistic companies, one making bulk drugs and the other making dietetic foods. Wockhardt became a deemed public company in the year 1985.

Wockhardt Limited went public with its maiden IPO in December 1992. In February 1994 it became the first Indian pharmaceutical company to issue GDRs. 

Wockhardt Ltd was incorporated on July 8,1999. On January 1, 2000. pursuant to a scheme of arrangement, the pharmaceutical business of Wockhardt Life Sciences Ltd (formerly known as Wockhardt Ltd) was transferred to Wockhardt Ltd (formerly known as Wockhardt Pharmaceuticals Ltd). Further, in terms of a scheme of amalgamation, the assets and liabilities of Wockhardt Veterinery Ltd were transferred to the company with effect from January 2,2000. 

The company took over RR Medipharma, a parenterals manufacturing company in 1996. In 1998 the company acquired Tata group company Merind. 

With this acquisition Wockhardt expanded its therapeutic coverage to 43 per cent in domestic formulations and its presence in veterinary business. At the same time Wockhardt acquired Wallis Laboratories, UK in 1998 for US$8mn and has successfully turnaround this company in a year's time. 

Effective January 1, 2000, Wockhardt has demerged its operations into two separate companies. Now Wockhardt Limited handles knowledge-based pharmaceuticals and bulk drugs business while Wockhardt Life Sciences Limited would be looking after agri-sciences, IV fluids and hospitals. Both the companies would be listed on the Luxembourg bourse, apart from BSE & NSE. Existing shareholders and GDR holders of Wockhardt Ltd have been given one share of Wockhardt Life Sciences against one share of Wockhardt Ltd. held.

Currently, Wockhardt operates in India through a 1300-strong field force covering over 160,000 medical practitioners. The company covers 50% of the therapeutic segments through six therapy-focussed marketing divisions. Wockhardt's has a significant presence in pain management, cough therapy, psychotic drugs, diabetology, vaccines, nutrition and animal health. 

Brands

Some of Wockhardt's brands include

Diabetology 
Wosulin (Recombinant Insulin) 
Mopaday (Oral Antidiabetic)
Glimaday (Oral Antidiabetic) 

Nephrology
Wepox (Recombinant Erythropoietin) 
Pain Management
Proxyvon 
Spasmo-Proxyvon 
Nutrition
Methycobal
Dexolac
Decdan
Neuro-Psychiatry
Libotryp 
Tryptomer 
Cough Therapy
Zedex
Bro-Zedex
Viscodyne 

Wockhardt's biotech business

Biotech is one of the mainstays for Wockhardt. Wockhardt’s has proven capabilities in various facets of biotechnology discipline including, gene cloning, development of production strains, expression of proteins in all major expression systems -- yeast, mammalian and bacterial cells, purification, downstream processing and testing.

Wockhardt launched recombinant human insulin (Wosulin) first time in the Indian market during 2003. The automatic insulin delivery device, Wosulin Pen with recombinant insulin cartridge followed.

Apart from Wosulin, Wockhardt launched hepatitis-B vaccine (Biovac-B)and erythropoitin (Wepox),) during last four years. Its biotechnology products onstitute 10 per cent of sales in the Indian market. 

Wockahardt commissioned its Biotech Park in Aurangabad during 2004. This project is built as per USFDA and EMEA standards. Wochkardt Biotech Park has six dedicated manufacturing plants with capacities catering to 10 per cent to 15 per cent of the global demand for major biopharmaceuticals.

Global operations

In recent years, Wockhardt’s growth has been propelled by consistent expansion in the global generics market. Wockhardt is focusing more on value-added generics for developed markets and supply of biogenerics to less regulated markets.

Wockhardt's generic programme for the advanced markets centres around the three strategic platforms: injectables, blockbuster molecules going off patent and value-added generics. 

Wockhardt in Europe

Wockhardt has made three acquisitions in the European markets of UK and Germany. In the UK Wockhardt acquired Wallis Laboratory in 1998 and CP Pharmaceuticals in 2003. In 2004, Wockhardt acquired esparma GmbH, which signalled its entry into the German market. 

Wockhardt UK Limited 

Wockhardt UK Limited is amongst the 10 largest generics companies in UK and the second largest hospital generics supplier. The company has an FDA-approved manufacturing facility for injectables. Wockhardt UK has entered into a product development and contract manufacturing relationship with Amylin Inc. for Exenatide. 

Being a manufacturing base for Europe, Wockhardt UK has built up a critical mass in the segments of Retail Generics, Hospital Generics, Private Label GSL / OTC Pharmaceuticals, Dental Care (denture cleaning tablets, powders and fixative creams). Wockhardt UK’s oral healthcare products are sold both as own (ConfiDent brand) and private label to a large number of European retailers such as --- Boots, Superdrug, Sainsbury, ASDA, Morrisons (UK), Kruidvat, Delhaize, VIP, Aldi, and Redwin (Global).

esparma GmbH

esparma has a strong presence in the high-potential segments of urology, neurology and diabetology, assisted by a dedicated sales & marketing infrastructure. 

Wockhardt in US 

To make a firm grip in the world’s largest market, Wockhardt established its own sales and marketing organisation, Wockhardt USA Inc. With this setup, the company will be able to capture value from end to end of the supply chain. Wockhardt’s US business is the fastest growing business with a growth of 91%.

Wockhardt has filed abbreviated new drug applications (ANDAs) with the US FDA, with a target opportunity of US$ 4 billion. More than 50 products are in various stages of development. The company has also received approvals from the US FDA for six ANDAs for the US market: famotidine, ranitidine, captopril, enalapril, bethanechol chloride, and cefuroxime axetil.

Wockhardt has subsidiaries in US, UK and Brazil. It has majority-owned companies in South Africa and Mexico. The company has got a subsidiary in Brazil, also. Wockhardt has full-fledged operations in Russia, Ukraine, Kazakhstan, Brazil, South Africa, Vietnam, Myanmar, Sri Lanka, and the African countries of Kenya, Ghana, Nigeria and Tanzania.

Wockhardt's Strategic Alliances

Wockhardt entered into joint venture with Sidmak Laboratories Inc., USA for marketing Wockhardt's products (around fifteen of them) in the US market. Wockhardt has a collaborative arrangement with Ferring AB, Norway for marketing OTC and generic pharmaceuticals in the Scandinavian region. The company's Egyptian JV commenced operations in September 1998. Wockhardt had a joint venture with Rhein Biotech GmbH, Germany, to form Wockhardt Rhein Biopharm Ltd., for recombinant bio-pharmaceuticals. A Chinese JV, Weihai Wockhardt Pharmaceutical Company Ltd, is also inked to make formulations. 

Wockhardt has manufacturing alliances with leading pharmaceutical and biotechnology majors, including Astra Zeneca Cell Therapeutics, Aventis Lab, Aguettant, Schering-Plough & Eisai. 

The company also entered in strategic alliance with Ranbaxy Pharmaceuticals Inc for enalapril and ranitidine tablets in US. It has tie up arrangement with IVAX Pharmaceuticals Ltd, UK for marketing generic nizatidine capsules. It has also strategic alliance with Eisai of Japan for marketing of methycobal. 

A key growth driver at Wockhardt is its state-of-the-art, multi-disciplinary research capability backed by a team of 400 skilled scientists. Consistent efforts have resulted in six breakthrough biotechnology products, 150 patent filings and a pipeline of promising new molecules.

Research & development

Wockhardt has a dedicated and research complex, with 400 scientists. The company’s investment in research over the past years has been on the increase. Wockhardt's R&D activity is mainly focusing on biotechnology, NDD, NDDS, patents and technology improvement in fermentation, chemical and pharmaceuticals.

The New Drug Discovery team at Wockhardt has developed a number of lead molecules mainly in the anti-infective field, that are currently in various stages of development.

The most advanced of these New Chemical Entities (NCEs) is WCK 771 that has commenced Phase II human clinical trials. WCK 771 is a broad-spectrum antibiotic, which has proven effective in treating diverse staphylococcal infections like MRSA and VISA. WCK 1152, a promising lead molecule to treat respiratory tract infections, including hospital-acquired infections, is undergoing Phase I clinical trials. 

Finances & Outlook

Wockhardt reported a 44% increase in operating profit at Rs. 63 crore on consolidated sales of Rs. 351 crore for the first quarter, ending 31 March 2006. Operating margins improved by 380 basis points. 

However, one-time write offs and expenses amounting to Rs. 23 crore relating to inorganic growth initiatives and inadequate provisioning of chargebacks in the US for the previous period amounting to Rs.38 crore resulted in a net loss of Rs. 3.7 crore. 

"Our operations during the quarter resulted in a 44% growth in operating profits," Wockhardt chairman Mr. Habil Khorakiwala said. "Our core operations continue to do well. However, we took a hit on net profit during the quarter because of the one-time write offs. This I take as a part of our US business learning curve." 

Formulations business in India grew by 58%. Power brands contributed 72% of the Indian formulation business. Key therapeutic areas registered impressive growths - biotechnology 45%, diabetology 53% and nephrology 88%. Wockhardt aims to expand its Indian business by launching new products in cardiology, oncology and dermatology during this year. It is also exploring in-licensing opportunities in these areas. 

Wockhardt UK launched natural insulins in Canada during the quarter after their approval by Health Canada authorities. Esparma launched Tamsulosin, a drug used in the management of prostate enlargement, on the first day after patent expiry. New product launches, planned both in UK and Germany, will fuel European growth during the year. 

In US, the Company received US FDA approval for Ranitidine 75 mg, the OTC version of the anti-ulcer drug. Four new products have been launched during the quarter, which would power the US business, along with new product approvals expected during the year. 

There has been a change in leadership in US. Wockhardt's executive director Mr. Lalit Kumar has taken over the US operations from 1st January 2006. Appropriate systems have also been implemented to ensure that chargebacks are properly accounted on timely basis. 

The company is focusing more on US and European Union for expanding its marketing activity. It export mix is fast shifting to a formulation dominant portfolio from an erstwhile bulk dominant one. It has filed a number of ANDAs and DMFs and the business to the developed regulated nations is expected to drive the growth in the future. 

Wockhardt has a robust pipeline of products in various stages of pre-clinical and clinical trials. It has completed phase III clinical trial on interferon alpha 2b, used in the management of cancer. Pre-clinical work has been completed on growth stimulating factors and on the long-acting Glargine, a new advance on insulin. The company has setup a bioinformatics cell to undertake research in metabolic engineering. The team is working on producing multiple clones from a single gene and on making multiple gene expression cassettes. Its anti infective drug discovery took a major leap, of late and received global recognition.

Wockhardt Board of Directors

Habil Khorakiwala
Chairman 
Felipe B Alfonso 
Director 
Shekhar Datta
Director 
Dr. Abid Hussain
Director 
Dr. B L Maheshwari
Director 
Aman Mehta
Director 
Bharat Patel
Director 
R A Shah
Alternate Director 
Lalit Kumar
Executive Director

Registered Office: Wockhardt Towers Bandra-Kurla Complex Bandra (East), Mumbai - 400 051
Tel: (91-22) 26534444
Fax: (91-22) 26534242
 Wockhardt website


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