‘FullrecoveryforUSsalespossibleonlyby2019-2020’

The country’s pharma sector is in a transformative phase, following the pricing pressure on generic drugs in the US market. While most are making a transition to less-competitive complex generics and specialty drugs, Wockhardt is going beyond with the company’s novel-drugs pipeline of five antibiotics. HABILKHORAKIWALA, chairman of Wockhardt, is playing David vs Goliath to get a share of blockbuster drugs market in the US, dominated by multinational giants. Only 11 antibiotics in clinical trials have received a qualified infectious disease product (QIDP) status from the US drug regulator (FDA), of which five are Wockhardt’s. In an interview with

Abhineet Kumar and Aneesh Phadnis, Khorakiwala speaks about the company’s revival plan. Edited excerpts:

With changing competitive dynamics in the US, do you think Indian pharma will be able to retain its significance?

A perception that pricing pressure and FDA issues will become a major handicap for growth of Indian pharma is not true. The industry, 15-20 years back, was not even present in the US. And, the US is one of the most competitive markets.

But, we got 35-40 per cent of prescription for all products in 15 years. That is the strength and resilience of Indian pharma industry. It started with the API (active pharmaceutical ingredient), then pure generic and is now getting into complex generics. There will be ups and downs from company to company. But, we will continue to play a significant role as a country.

Is the transition to complex drugs going to help?

Complex drugs will be less competitive than vanilla generics but it is still going to be competitive as global players are there. For any given product, if not 20, at least half a dozen players would be competing. This would mean new entrants face a lot of challenge. The market has become tougher with increasing competition, consolidation in distributors’ space and increasing regulatory overview. So, newer entries will be even more challenging.

What is Wockhardt’s in the US strategy for generic drugs?

We have 79 ANDAs (abbreviated new drug

applications) approval pending, and the same number is also approved.

We have FDA-related issues (five manufacturing plants facing compliance issues), which we expect to be resolved soon. We should also discontinue one or two operations as part of the process. Some of the products we are already getting outsourced. From the point of view of research and development (R&D), since we have such a large portfolio of approved and pending products, we are comfortable for the next few years.

When could we expect Wockhardt’s sales from the US to get back to the level before the FDA regulatory challenges?

Very difficult to say. We were over $500 million sales before regulatory challenges came up (about five years ago). Our current business is $100 million-plus. We may not be there soon but maybe after two-three years. In 2018-19, we can see a small recovery but full recovery for US sales would be possible only by 2019-20.

Indian pharma’s record in novel drugs for the US is rather bleak. What gives you the confidence?

One reason we succeeded in antibiotic research in the past 20 years is because many companies had vacated that space. I spent two years to learn how drug discovery takes place, and what are the up-sides and down-sides. Ultimately, we are competing with big pharma firms and do not have similar resources. We have to find a way to succeed with very limited resources. So while others went for big research business for diabetes and cancer, we went into antibiotics. Big pharma firms had vacated that space since 1980s.

All R&D we have done for innovative products for the past 20 years is coming up for the final phase of clinical trials. WCK 5222 and WCK 4282 are going for clinical trials globally and have entered phase-III. By the end of 2019, they should have approvals.

Also, we will be completing phase-III trial for two drugs for India (WCK 771 and WCK 2349) and hope to launch them in the domestic market. For WCK 4873, we are planning to initiate phase-III study in India during the second half of 2018 following regulatory approvals.

The clinical study in India is expected to be over in 2019 and product launch would follow in 2020.

Why did the big pharma vacate it if it is a big opportunity?

There were no billion-dollar products expected in the antibiotics. Now, the prices of antibiotics have gone up in the US. A few years ago, these drugs were priced around $100 a day but those were introduced in the past two years are priced at $1,000 a day. And our products are better than them.

Reality is that if these super bugs are not treated then there will be deaths because of that. About 10 million people were expected to die by 2050 if the drugs were not discovered. But it won't happen now.

Marketing novel drugs in the US has also been costly, deterring many to out-licence their products. What is your plan?

For the US, we will do our own marketing for both molecules. We never had the thought that we would research and licence-out the product. Conceptually, we thought of making it an integral part of our business. Ours is lifesaving drug that will be used in hospitals’ intensive care units (ICUs). So, we would require maximum of 200 people to cover the whole country. And, we can create a marketing organisation. But, for China we may outlicence the product because of market complexities.

Your revenue expectation from these novel drugs for the US?

We had McKinsey do a study of our molecules and their view was that WCK5222 has a potential of more than $1 billion in peak sales in the US market. It will start contributing the moment we launch. In five years, we expect it to reach peak sales.

Five years is a reasonable time in antibiotics. In other space it may take a little longer. But, we do not really know about this drug as there is a big vacuum and it could reach peak sales much faster.