Diabetes to be our focus in India, US: Wockhardt's Habil Khorakiwala

Wockhardt
After selling parts of its branded business to Dr Reddy’s Laboratories for Rs 1,850 crore on Wednesday, Wockhardt is gearing up to focus on its diabetes portfolio in India and the US.

 

“Antibiotics and drug discovery will be one of the main long-term focus markets. We will also focus on diabetes as a portfolio because we have the whole range of products from oral solids to insulins,” Habil Khorakiwala, founder-chairman, told Business Standard.

 

He said the US had relaxed regulations for approval of biologic drugs, including insulins, recently. “Earlier, they were asking for extensive clinical work. While a normal biologic would have required $16-17 million for clinical trials, now the cost would be $10-12 million for the data they are asking for. This reduces costs significantly,” Khorakiwala said.

 

Wockhardt is present in emerging markets like Mexico, Brazil with insulins. “We will now also look at the US. We are not present in the US insulin segment currently,” he said, adding that the diabetes portfolio has limited competition market globally and, thus, Wockhardt now wants to focus on this segment.

 

The company has drawn up plans for the India market, too. According to Khorakiwala, Wockhardt has come up with a new marketing strategy and is using affordability as its key proposition, especially for insulins. “We think we would be able to expand deeper. We will introduce products with 50 per cent more insulin at the same price. Doctors do not have only rich patients, so we think this proposition would work,” he said.

 

Insulins alone are a Rs 2,500-crore market. “If we get 15-20 per cent share in next three to four years, it would be significant in terms of value.”

 

For oral diabetes products, the drugmaker has come up with a new tech. At present, products are available with sustained release technology, where some short-acting drugs have a 24-hour action. “Our product has a laser reading and the drug comes out gradually. So, it gives much better clinical control. We have introduced one product and will bring in more,” he said. Wockhardt plans to use this tech for every diabetes drug that has metformin in it. The business sold to DRL contributed 34 per cent to Wockhardt’s standalone revenues in the first nine months of FY20. Sale of select divisions of the domestic branded business may not affect the firm’s  growth in the long run, analyst say.

 

Analysts at Motilal Oswal said, Practin, Zedex, Bro-Zedex, Tryptomer, and Biovac are the five brands that form  40 per cent of the acquired business. “These brands have delivered 2 per cent sales CAGR (according to AIOCD) over past four years, largely led by better pricing," it noted. The brokerage felt that DRL may see an earnings addition of Rs 80-100 crore from this acquisition. 

 

Part of the funds from the acquisition would be used to fund clinical trials for the novel antibiotic pipeline that Wockhardt has. It recently got the Indian drug regulator approval for two new antibiotics which it plans to take to the emerging markets as well as China. Moreover, it has new molecules in the pipeline which it plans to take to regulated markets like the US.



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