Wockhardt Ltd Aims To Turnaround Business Operations With Restructuring Of US Operations And Vaccine Tie-Up With Serum

Company reports strong performance in Q4FY23 with 3 fold jump in EBITDA

Wockhardt Ltd - global pharmaceutical and biotechnology is aiming to turnaround its business operations and has perused important strategic initiatives for the same. Company is eying big on the restructuring of the US Business, vaccine tie-up with Serum for vaccine manufacturing in UK and Novel Antibiotics research to drive the business forward. For the Q4FY23, company posted strong operational performance with 7% Y-o-Y growth in revenue with three fold jump in the EBITDA to Rs. 47 crore.

In the restructuring of its US operations, company is shutting down its manufacturing facility at Morton Grove and transferring the site to contract manufacturing organisations. This restructuring is estimated to result in annual savings of ~US$ 12 Mn. Post restructuring company looks to maintain sales with a 40 percent gross margin and manufacture few products with higher margin through a third party.

Additionally, in March 2022, company had signed a 51:49 (Wockhardt 51 and Serum 49) Joint Venture with Serum Institute of India for manufacturing vaccines at its UK facility. As contribution for reserving capacity, Wockhardt has received a consideration of 10 million Pounds. The contract with Serum is for 150 million doses across 15 years and it has already identified two vaccines for the same. Company plans on manufacturing these vaccines post regulatory approvals and exhibit batches over the next 8-12 months.

Wockhardt is a leading R&D company and have comprehensive end to end drug discovery programs in Antibiotics. Six of the company's programs have been granted Qualified Infectious Disease Product (QIDP) status by the USFDA. Company's novel antibiotic - Emrok, which is already being marketed in India is expected to win approvals in eight other emerging markets in the next six to nine months. The flagship novel antibiotic - WCK 5222 is currently under global phase III clinical trials, which are expected to complete in the next 15-18 months. The company expects to market the product in the US, China, and India by 2025.

Wockhardt is a global pharmaceutical and biotechnology organisation, providing affordable, high-quality medicines for a healthier world. It is India's leading research-based global healthcare enterprise with relevance in the fields of Pharmaceuticals, Biotechnology and a chain of advanced Super Speciality Hospitals. Company has 3 research centres and 12 manufacturing plants, with businesses ranging from the manufacture and marketing of Pharmaceutical and Bio-pharmaceutical formulations, Active Pharmaceutical Ingredients (APIs) and Vaccines.

The company has reported improvement in the operation and financial performance over the period of time and also managed to bring down its long-term external debt to Rs 608 crore from Rs 3,218 crore in financial year 2017. For Q4FY23, company reported 7% growth in revenues to Rs. 710 crore with EBITDA rise 3-fold to Rs. 47 crore.

Recently, CARE Ratings Limited (CARE Ratings) have assigned a rating of CARE BBB- to the Company and reaffirmed the ratings of CARE BBB- (Triple B Minus) for the Long/Short Term Bank Facilities and Non-Convertible Debentures of the Company. The reaffirmation and revision in outlook factors in the strong operational profile and experienced promoters along with healthy liquidity maintained by the Group.