Why this pharma stock hit nearly 9-year high; froze at 10% upper circuit?

Wockhardt stock gained 10% to touch Rs 1,536.40; it has outperformed the market by zooming 262% thus far in calendar year 2024, as compared to the 13% rise in the BSE Sensex

Wockhardt shares hit a nearly nine-year high of Rs 1,536.40, as they locked in 10 per cent upper circuit on the BSE in Monday’s intra-day trade after the company announced the successful use of its drug Zaynich in a patient suffering from Cancer in the US. 

 

The stock of the pharmaceutical company is trading at its highest level since January 2016. It had hit a record high of Rs 1,996.66 on March 12, 2013. Till 10:10 AM, a combined 1.9 million shares had changed hands and there are pending buy orders for 130,000 shares on the NSE and BSE. In comparison, the BSE Sensex was down 0.18 per cent at 81,986 around the same time.

 

 

Wockhardt said in an exchange filing said that its drug Zaynich (Zidebactam/Cefepime, WCK 5222), has enabled a US cancer patient to undergo a successful liver transplant and resume chemotherapy, as the drug was able to eradicate dual extreme-drug resistant Gram negative pathogens in the patient.

 

Zaynich, a combination of Zidebactam & Cefepime, is Wockhardt’s novel proprietary antibiotic, targeted towards multi-drug resistant Gram-negative infections. It is currently nearing completion of Phase III study which would support its registration/marketing authorisation globally. 

 

Earlier, multiple Phase I studies, including clinical pharmacology studies with zidebactam/cefepime were conducted in US. Zaynich (Zidebactam/Cefepime) is also undergoing a clinical study in India for the treatment of carbapenem-resistant infections.

 

Wockhardt is a research-based global pharmaceutical and biotech company. Wockhardt’s New Drug Discovery programme has focussed on unmet need of anti-bacterial drugs that are effective against the menace of untreatable superbugs. Wockhardt is the only company in the world, where the US FDA has given a QIDP Status (Qualified Infectious Disease Product) for six of its anti-bacterial discovery programmes – three of them are Gram Negative and three Gram Positive, effective against untreatable “Superbugs”. 

 

Meanwhile, currently, Wockhardt is trading 39 per cent higher over its qualified institutional placement (QIP) price of Rs 1,105 per share. On November 11, the company had raised Rs 1,000 crore by allotting 9.05 million equity shares to qualified institutional buyers (QIBs), including Tata Mutual Fund, HDFC Mutual Fund and Bandhan Mutual Fund.

 

Earlier, in March 2024, the company had raised Rs 480 crore by issuing 9.29 million equity shares to QIBs at a price of Rs 517 per share. The funds raised will be utilised largely to meet its clinical R&D program, and secondly to deleverage the balance sheet, the company said.

 

Thus far in the calendar year 2024, Wockhardt has outperformed the market, with the stock price of the company zooming 262 per cent, as compared to the 13 per cent rise in the BSE Sensex.

 

Overall, export markets contributed approximately 78 per cent to the company’s revenues. The  company  derived  around 84 per cent  of  its  revenues  from  the  branded generic/generic formulations segment and around 15 per cent from the biosimilars segment, while the balance was derived from  the  NCE  segment,  in  which the  company  sells Emrok and  Emrok  O  in  the domestic  market. 

 

The company is currently focusing on launching its existing biosimilars in markets where it does not have a presence and launching new biosimilars (such as insulin glargine) in existing and new markets to support its growth, going forward, according to ICRA.

 

ICRA also notes that the company has partnered with Serum Institute of India (Serum), to manufacture vaccines at the company’s manufacturing facility in the UK and revenues from the same are expected to commence from FY2026.

 

ICRA expects that the company will be able to meet its near-term debt repayment obligations, fund its incremental working capital requirements and incur the pending expenditure towards completing the  phase-3  clinical  trials  of WCK 5222 (Zaynich - Zidebactam/Cefepime) through  its  existing  cash  balances and expected internal accruals.