Mr Khorakiwala puts out a cogent argument in his autobiography on how Big Pharma’s 30-year break with antibiotic R&D allowed Wockhardt to build an unassailable lead in terms of human capital, a crucial element of success in pharma R&D.
Currently there are 10 other companies besides Wockhardt, and between them, they collectively have 16 new antibiotic drugs in the pipeline at the clinical stage, with five alone from Wockhardt. A “high five”, as Mr Khorakiwala puts it, which will take the firm into the next orbit in the next few years as these come to commercialisation. Mr Khorakiwala grew up in Bombay of the 1960s and 1970s in a Dawoodi Bohra joint-family with a disciplinarian father, caring and soft-mannered mother, and a conservative uncle who initiated him into the world of pharmacy. He managed to have a normal, enjoyable childhood, listening to Hindi songs on Radio Ceylon, going half way around the world with a travel-crazy father, suffering the vegetarianism of hostel life in Ahmedabad only to be rescued by a benevolent uncle who took him in his house.
The elder Khorakiwala (Fakhruddin), having outgrown the family’s traditional retail business in Akbarallys, had branched out into chemicals manufacturing and has bought Worli Chemical Works in the late 1950s. Junior Khorakiwala’s push into pharmacy was also enabled by this business expansion, and after graduation in Ahmedabad, he headed for a masters in pharmacy at Purdue University in Indianapolis, United States.
Mr Khorakiwala writes candidly about his family’s efforts to make the US-bound youngster bond with his roots, family, and religion. On the eve of his departure to the US, his father took him on a pilgrimage to most Dawoodi holy sites in India, and even got him an audience with the community’s religious leader, Syedna. En route the US, Mr Khorakiwala broke his journey in Beirut to visit Karbala, home to the shrine of Imam Hussain, Prophet Mohammed’s grandson. The theme of rootedness, of old-world values of being fair and honest in all dealings, and not being afraid of making mistakes comes across often as you flip the pages. So, even business rivals like late Parvinder Singh (Ranbaxy) and Anji Reddy (Dr Reddy’s) come across as “good friends”.
Back home in Bombay after Purdue, the family firm changed name to Wockhardt in 1973, shifted business from chemicals to pharmaceuticals, and moved out to Aurangabad — which senior Khorakiwala agreed to very reluctantly — in interior Maharashtra in 1976 to take advantage of the industrial policy put out by the then state government. The Indian Patent Act 1970, with its “process, not product” focus, gave a huge fillip to local manufacturing of drugs and pharmaceuticals. The 1991 economic liberalisation heralded by the balance-of-payments crisis opened India to the world, and Indian businesses started exploring foreign markets.
All this put the wind behind Wockhardt’s sails in its formative years. It was one of the pioneers in biotech space in the country, becoming the first Asian firm to develop recombinant human insulin, got into hospital business in 1990, set up global operations, and was the first Indian drugmaker to issue a Global Depository Receipt. Starting in 1998, Wockhardt went shopping globally big time, as many as six acquisitions in the decade to 2007 — two in the UK, three in Europe, and one in the US.
The company went public in 1992, and the IPO was closed three days ahead on December 5 against the advice of the merchant banker as Mr Khorakiwala had weighed in that the issue was already subscribed four times and that the impending Babri Masjid issue was coming to head next day on December 6. The “disputed structure” was brought down on that fateful day, and on Monday, December 7, markets tanked! Another theme that runs across the book is that Wockhardt is not just another pharmaceutical company merely exporting cheap medicines. Mr Khorakiwala takes pains to illustrate how “going global meant not just doing business around the world but also being linked with the global knowledge creation network.”
Being through the vicissitudes of the business cycle — the US FDA scanner, fire sale of what could have been a blockbuster business in nutrition, selling over half of all hospitals, debt restructuring, derivatives trading going wrong et al — Mr Khorakiwala is betting big on anti-infectives, essentially new antibiotics. He believes India can be the “fifth hub” of pharmaceutical and biotech R&D in the world after US, Europe, Japan and China. Five it seems is his favourite number!