Mumbai-based Wockhardt has become the first Indian pharmaceutical company to get the drug regulator's nod for two novel antibiotics, which it plans to launch in the next few months in the domestic market.
The Drug Controller General of India (DCGI) has approved Emrok (injectable) and Emrok O (oral), used for acute bacterial skin and skin structure infections, including diabetic foot infections. The approval is based on a phase 3 clinical study involving 500 patients in 40 centres across India.
While multinational companies have launched new antibiotics in India, there have been no new launches in the past 15 years in this category (gram-positive bacterial infections).
Wockhardt plans to take these drugs to emerging markets and China soon. The company expects to build them into Rs 100-crore brands over the next 18-24 months.
The new drug will target superbugs, which have become resistant to other molecules.
At present, antimicrobial resistance is a major public health concern globally, and is estimated to cause 2 million deaths in India alone by 2050. Infections caused by drug-resistant organisms could lead to increased mortality and a prolonged duration of hospitalisation, and India is especially susceptible to this problem.
Wockhardt shares closed 5.7 per cent higher at Rs 273.85 after the announcement on Thursday.
Wockhardt Managing Director Murtaza Khorakiwala said the company saw a huge unmet medical need in this segment.
"Wockhardt becomes the first domestic drug maker to get approval for novel antibiotic drugs discovered, developed and manufactured in India," he said.
Wockhardt's new drugs are hospital antibiotics and will be used primarily through the hospital channel for treating critical infections. Of India's Rs 16,000 crore antibiotics market, roughly 30-40 per cent is injectable antibiotics in terms of value. Antibiotics constitute 12 per cent of the Indian pharma market.
Wockhardt will also take both drugs to the emerging markets and is eyeing the Chinese market too through partnerships. China is the largest market for antibiotics globally in terms of volumes. Habil Khorakiwala, founder chairman of Wockhardt, said that in dollar terms, the Chinese market for antibiotic injectables was double that of the US market.
Wockhardt claims that the current antibiotics available in this segment have multiple side effects like potential kidney damage and bone marrow damage. "This limits their use in critically ill patients," Khorakiwala said adding that Emrok and Emrok O have a better safety profile. It is also one of the most scientifically profiled molecules in this space.
The size of Indian Antibiotic market is approximately Rs 16,000 crore, growing at 7 per cent and is one of the largest therapeutic segment, with a 12 per cent market share of the Indian Pharmaceutical Market.
The World Health Organisation (WHO) in 2017 has listed MRSA as a ‘high’ priority pathogen due to high prevalence of resistance, mortality rate, a burden on community and health care settings. In 2018, a national study conducted by the Indian Council of Medical Research (ICMR) and Anti-microbial resistant surveillance network (AMRSN) group highlighted the high prevalence of 38.6 per cent of MRSA in India. A recent Indian study reports that 1 in 6 patients infected with multidrug-resistant gram-positive infections die in intensive care units.
The debt burden
While Wockhardt would need more funds to be pumped into R&D as it develops its antibiotic pipeline, the company has a huge debt to service. As on March 2019, its net debt stood at Rs 2,913 crore. The firm has managed to pare that down - to approximately Rs 2,300 crore as on December.
It had a Rs 340-crore payment due in December. Out of this, it had a refinance done for about $40 mn (or around Rs 280 crore). It was an international refinancing, sources said. The balance was paid from internal resources and the promoters' family office.
Analysts felt that the approval for the new antibiotic may not open up a huge revenue stream immediately for the company as these are niche drugs. "However, if they get nod for the lead molecule in the pipeline, there will be a significant revenue upside. On the whole, this is indeed a positive development for the company," said a Mumbai based analyst.
Khorakiwala did not wish to comment on how the firm planned to raise funds or whether private equity investors would come on board. He, however, clarified that there were no plans to hive off the R&D unit into a separate company and monetise the pipeline.