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Drugmaker Wockhardt posted a loss of ₹207 crore in Q2FY23 ended September 30, 2022, compared to a ₹37 crore profit after tax in the corresponding period last year.
It recorded a revenue of ₹679 crore in the quarter under review, compared to ₹862 crore in the same period, last year and ₹595 crore in previous quarter of this financial year.
UK business
The company’s business in the UK stood at ₹226 crore in the said quarter (compared to ₹387 crore in the previous year), accounting for 33 per cent of its global revenue. Its India business stood at ₹150 crore (compared to ₹187 crore in the previous year), accounting for 22 per cent of its revenues. Wockhardt’s India business has been in the news recently, following reports of a possible strategic investor or an outright sale. The company’s official response to the report that it was “speculative in nature.”
Wockhardt’s emerging markets business stood at ₹117 crore in Q2FY23 (compared to ₹165 crore in the previous year). This market contributed about 17 percent of the global revenue.
US Business
Its business in the US stood at ₹89 crore in the period under review, compared to ₹61 crore in the previous year. The US market contributed 13 per cent to its global revenues. This market was impacted by price erosion and supply disruptions, the company said.
On the US market, the company reiterated an earlier disclosure on restructuring. “In view of the changed pharmaceutical market situation in the United States, the management had initiated various steps to restructure its USA business by closing down its manufacturing facility in Illinois, US and undertaking its business in the US through contract manufacturing the products sold by it in US/North America by engaging USFDA approved manufacturing partners meeting the quality standards acceptable to the Company.”
Wockhardt has engaged multiple USFDA-approved manufacturing partners, after thorough due diligence and inspection of their facilities, to manufacture various products for sale in US/ North America under the Wockhardt brand, it said.
The new arrangement is in the best interest of the company as, it “will help the Company to avoid the manufacturing and quality management costs completely and allow the management to focus on penetrating and expanding the market share of its products in the US and North America,” it added.
The Group has provided for Rs 123 crore with regard to its property, plant and equipment, Rs 16 crore for inventory and other expenses of Rs 6 crore pursuant to this restructuring. “The company had accounted for a contract asset of Rs.50 crore pursuant to a contract manufacturing agreement. The customer is yet to fulfill its contractual obligations and commitments. Though, the Company is pursuing various options and taking necessary actions related to this matter, given the uncertainty, Company has provided for this contract asset,” it said.
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