Wockhardt details plans to restructure by spinning off its R&D business.
MUMBAI, India—Pharma and biotechnology company Wockhardt in January decided, in principal, to demerge its research and development business into a separate entity. The new company would house the new drug discovery program and the innovative new technologies being developed by the R&D team, according to Wockhardt."The R&D business has great potential and needs to be a focused entity for carrying out unrelenting research activities for the future," says Habil Khorakiwala, chairman of Wockhardt. "At Wockhardt we recognize this fundamental need and are restructuring our R&D business to unlock true value for all our stakeholders. This will ease the company to invite strategic investors interested in the R&D business."Wockhardt's board of directors has also in principal given its nod to raise equity and equity-linked securities to the tune of $200 million to expand domestic and international operations. The Financial Express noted in a recent article that Wockhardt's new company would inherit three new chemical entities under clinical trial stage development, including: WCK 771, an antibiotic for various diseases now in Phase II clinical trials; WCK 1152, a drug to treat respiratory tract infections including hospital-acquired infections; and WCK 2349, an anti-fungal drug currently in Phase I trials. Reportedly, Wockhardt also has at least four pharmaceutical compounds in the preclinical development stage.Wockhardt follows in the steps of several other companies in India that have made similar moved since 2007, the Financial Express also notes. This includes Sun Pharma, which demerged its innovative research into a new company, Sun Pharma Advanced Research Centre that was subsequently listed on the exchanges; Nicholas Piramal India, which spun off its novel drug discovery research operations into a separate company; and Ranbaxy which has decided to demerge its drug discovery research operation. Wockhardt Limited is a technology-driven pharmaceutical and biotechnology company with an active multi-disciplinary research program employing more than 500 scientists. Its current R&D locations are spread among Wockhardt's Indian facilities in Aurangabad and Mumbai, Negma Laboratories in France, Morton Grove Pharmaceuticals in the United States, and two non-Indian Wockhardt locations in the United Kingdom and Ireland. DDN