Wockhardt scours for more buyouts in Europe

Wockhardt Ltd is considering more acquisitions in Europe, Chairman Habil Khorakiwala told investors and analysts last Thursday, a day after the pharmaceutical company reported earnings for third quarter. The European Union has emerged as a key market for Wockhardt, he said.

Wockhardt was actively looking at acquisition candidates in Europe, Khorakiwala said at a post-earnings conference.

In July, Wockhardt's board had in-principle approved an $100 million treasure chest to spend on acquisitions in Europe. So far, Wockhardt has made three foreign acquisitions, namely, Wallis Laboratories, CP Pharmaceuticals in the UK, and the German company, Esparma.

Wockhardt has also set up an US subsidiary, Wockhardt USA Inc., to strengthen its presence in the generics market.

On a consolidated basis, in July-September, the third quarter of 2004, Wockhardt's net profit rose 13.6% year-on-year

The successful integration of Esparma has opened up the development of European business through mutual recognition route for Esparma products in the UK and CP Pharmaceuticals products in Germany, Khorakiwala said.

"Esparma contributed over euros 2 million to our consolidated revenues in Q3," he said.

The third quarter also saw the completion of integration of Wockhardt's UK operations and the sale of Luton manufacturing facilities.

"This will improve the efficiency and profitability of Wockhardt's UK operations," he said.

"The combined operations of Wallis and CP Pharmaceuticals under the umbrella of Wockhardt UK Ltd. will be the growth engine of the UK operations," he added.

"We are expecting a double-digit growth in our U.K. operations in 2005," he said. UK contributes approximately 35% of Wockhardt's consolidated revenue. He refused to divulge details of the sale of the Luton plant. "I can only say that the Luton plant was sold at book value, so we made neither a profit nor a loss," he said.

"Till date we have about 9 abbreviated new drug applications (ANDAs) pending approval" with the US Food and Drug Administration, Khorakiwala said. "We expect to get approval for two-three ANDAs in the current quarter," he added. The market size for the 2-3 products is expected to be $500 million.

During the quarter, Wockhardt USA. began selling two products, enalapril and bethanechol chloride, directly in the market.

Wockhardt now has three products""the third being captopril""marketed under its own label in the US.