Focus to continue on anti-infectives market abroad; no plan for out-licensing
Wockhardt, the pharmacautical major, is expected to join the billion-dollar (Rs 5,400 crore) revenue club by the month-end, with half of this inflow from America, Chairman Habil Khorakiwala said on Tuesday.
In the financial year ending March 2012, Wockhardt had reported consolidated income of Rs 4,613 crore. In the past year, it has focused on raising its margins from global operations and now has 1,500 employees in the US and Europe units, said Khorakiwala. As much as 80 per cent of revenue comes from global markets, with US operations growing 45 per cent in the December quarter.
The company saw a spectacular turnround after a near-death experience with a foreign exchange bet going wrong during the 2008 financial crisis and a subsequent loan default. “A lot of products are going off-patent in the US and we will continue to focus on the anti-infective market,” the chairman said.
This is worth $100 billion in revenue globally and Wockhardt is aiming to get a slice. Helped by a weaker rupee and rising sales in the US, the company seeks to improve its Ebitda (earnings before interest, tax, depreciation and amortisation) margins by eight to 10 per cent.
With this, Wockhardt joins pharma peers Cipla and Sun Pharma that are targeting markets abroad. Cipla announced a $500-million acquisition of its distributor in South Africa; Sun acquired Taro Pharma after a prolonged battle with the latter’s shareholders.
“Our major focus is R&D (research and development). We are spending seven per cent of sales revenue for R&D. In the last 10 years, we have transformed from an Indian company to a global company,” said Khorakiwala.
“We have no plans to out-license molecules. We might consider licensing marketing rights in countries where we don’t have a strong presence,” the chairman said.
Khorakiwala turns 70 tomorrow. He said the succession plan was for his son, Murtaza, to be managing director and the other son, Huzaifa, to look after the Wockhardt Foundation, the non-profit and social welfare arm. Zahabiya, the daughter, would look after the hospital business. There was no plan yet, he clarified, on how the equity of Wockhardt and the unlisted Wockhardt hospitals was to be divided among the next generation.
Wockhardt's shares closed at Rs 1,919 a share on Tuesday, from a 52-week low of Rs 528 a share on March 27 last year.
Analysts are now betting that the company's shares would touch Rs 2,500 a share, as its growth will be driven by limited competition products such as Geodon, Prevacid, Flonase, Stalevo and the recently launched Comtan in the US. Its Toprol XL market share now contributes 13 per cent of its total revenue in the US, while it targets 15-20 product launches every year in India, says a Citigroup report on the company dated February 18.
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