Wockhardt

Wockhardt has embarked on a journey of transformation, culminating in strong financial results for FY26. The company reported a top line of INR 3,373 crores, with EBITDA reaching INR 630 crores, marking a 51% growth. Profitability before tax stood at INR 238 crores, and the EBITDA margin significantly improved from 5.4% three years ago to 18.6% in the current year. The company maintains a healthy liquidity position with INR 662 crores in cash equivalents and a net debt-to-equity ratio of 0.1.

A major highlight is the US FDA approval of Zaynich, making Wockhardt the first Indian company to achieve this for an Indian research product. Zaynich targets carbapenem-resistant gram-negative infections, covering 95% of such cases in the US. Clinical trials showed a 96.8% composite cure rate, 20% higher than Meropenem. The company plans a global launch, starting with the US and India in the current year, followed by Europe and other emerging markets. Zaynich is projected to achieve global peak sales of $1.5 billion to $2 billion per year, with US daily costs ranging from $1,200-$1,500 and India prices discounted by 75-80%.

The biosimilar and biotech business, contributing 23% to the overall business, grew by 27% in the current year. Wockhardt has scaled up production of human insulin by 2x and Glargine by 1.5x. The company has two biosimilar products commercialized and five more in the pipeline, including Aspart and Semaglutide. Management aims to double the biosimilar business within the next 24-36 months and increase capacity by 100% within 12-15 months, targeting a $7-8 billion diabetes market in India and emerging markets.

Wockhardt's emerging market business, representing 28% of turnover, grew by 35%, supported by strategic partnerships in Brazil, Thailand, Algeria, and Malaysia. The UK business, comprising 39% of total business, grew by 13% and focuses on specialty injectables. The India business is driven by innovative products like Emrok and Miqnaf. The company plans to launch Zaynich in 7-8 emerging markets with high carbapenem resistance in the next 18-24 months, viewing India as a blueprint for these expansions.

Over the past three years, Wockhardt has focused on profitability, improving its EBITDA margin from 5.4% to 18.6%. This was achieved by exiting the loss-making US generics business, optimizing the supply chain, and implementing cost management initiatives across 50 projects. The company also restructured its supply chain and manufacturing, implemented S/4HANA, and is integrating AI-related initiatives to enhance efficiency and reduce costs.

The company anticipates a 'normal capex' of INR 200-300 crores over the next three years, primarily for biologicals capacity. Management expects the new business model for Zaynich to incur upfront costs, leading to a 'slight negative impact' on profitability in the initial 12-18 months, with breakeven targeted within 12-18 months. Wockhardt's strategy is to build the business itself rather than relying on partnerships, believing in a 100% commitment to its cause.

The US launch strategy for Zaynich involves building a strong leadership team, partnering with a commercialization partner for logistics and distribution, and focusing on deep clinical adoption in hospitals with high resistance levels. The company will emphasize the economic benefits of Zaynich, such as reducing readmission rates (cUTI re-admission rate is currently 20-25%) and length of stay. Manufacturing for the US market will be supplied from an FDA-approved site in Europe as a de-risking strategy.