The volatility in the Indian stock market has forced Wockhardt Hospitals to revise the price band to Rs 225 (20 per cent at the lower end) and Rs 260 (16 per cent at the upper end) per equity share (from Rs 280 to Rs 310) for its initial public offering (IPO) of 25.09 million equity shares of Rs 10 each for cash at a price determined through a 100 per cent book-building process.
The issue opens on January 31 and closes on February 5.
The Emaar-MGF management, on the other hand, has decided to stick to its price band of Rs 610-690 for 10.26 million shares.
The issue will open on February 1. The IRB Infrastructure Developers issue of 51.06 million equity shares (which opens tomorrow) has a price band of Rs 185 to Rs 220.
The offer comprises a net issue to the public of 24.59 million equity shares of Rs 10 each (the net issue) and a reservation of up to 500,000 equity shares for subscription by eligible employees.
The issue will comprise 24.06 per cent of the post-issue paid-up equity share capital of the company.
The proposed IPO of Wockhardt Hospitals has been assigned an IPO grade of 4 out of 5 by rating agency Fitch Ratings India, indicating above-average fundamentals.
Wockhardt Hospitals intends to utilise the proceeds from the issue to meet the cost of development and construction of greenfield and brownfield hospitals of the company, pre-pay some of the short-term loans and to meet general corporate expenses.
The equity shares are proposed to be listed on the Bombay Stock Exchange and National Stock Exchange.
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Thursday, January 31, 2008
Wockhardt cuts IPO price band on market woes
Thursday, January 10, 2008
Wockhardt to hive off NCE, R&D biz
Pharmaceutical major Wockhardt is planning to demerge its business of new chemical entities (NCE), original new drugs in the pipeline and in-licensed drugs from other companies and biotech drugs like insulin into a new company.
It would seek in-principle approval of the board to demerge its NCE research and development and certain high value products, subject to the approval of shareholders and other regulatory authorities, the company said in a release issued to the BSE today.
Wockhardt is in talks with various private equity (PE) funds and is also working on a qualified institutional placement (QIP) to fund the new entity, the release added.
When contacted, a spokesperson for Wockhardt declined to comment. Chairman Habil Khorakiwala was not available for comments.
Sources said Wockhardt's new company would inherit three NCEs under clinical trial stage development. This includes WCK 771, an antibiotic for various diseases that is now in Phase-II advanced human clinical trials, WCK 1152, a drug to treat respiratory tract infections including hospital-acquired infections and WCK 2349, an anti-fungal drug under Phase-I development. Wockhardt also has about four pharmaceutical compounds in the pre-clinical development stage.
The company also has an advanced research and development centre at Aurangabad, employing over 500 scientists, started two years ago with an investment of over Rs 50 crore.
Sources said a major attraction for the investors in the new company would be its rich biotech drug portfolio to be transferred from Wockhardt. It has already developed some fast moving drugs like Biovac-B, a hepatitis B vaccine, anaemia drug Wepox (recombinant erythropoietin), insulin branded as Wosulin and Glargine, a novel long acting insulin. These products, developed in the last few years through in-house research and developments, are likely to move to the new company, sources added.
Thursday, January 3, 2008
Wockhardt: Right diagnosis
The launch of anti-allergic cetirizine tablets in the US will give it the early mover advantage
The stock price of Wockhardt rose by 4 per cent after the company announced the launch of anti-allergic cetirizine tablets in the US market. Cetirizine, the generic for Zyrtec brand owned by Pfizer, has annual sales of $1.4 billion.
Other companies will soon get US FDA approval to launch the drug, resulting in a crash in the prices, but Wockhardt will have an early mover advantage.
Unlike other drugs going off-patent, cetirizine has another advantage. It has moved from being a prescription product to an OTC one and this would translate into better growth and margins.
The company will distribute cetirizine, besides the 56 products in its US portfolio, through Morton Grove Pharma, a US-based generic company acquired by it in October 2007. Morton Grove, with sales of $52 million largely from dermatological products, is expected to boost Wockhardt’s US sales efforts.
Wockhardt has also entered into a strategic tie-up with Leiner Health Products for distributing cetirizine to private label OTC markets.
Whereas the company has been active in the US market in the last seven years, sales from this region account for only 8 per cent of total sales for the nine-month period ended September 2007.
Analysts say the company’s product development to filing process has been slow and it has products in some highly competitive segments.
Europe accounts for 59 per cent of the company’s sales as it offers better opportunities, higher margins and is a relatively easier market to breach.
The company reported a 69 per cent jump in sales to Rs 738 crore for the quarter ended September 2007, largely on the back of its acquisition of France-based Negma Labs.
While the operating margins were up 230 basis points to 24.5 on account of lower R&D expenses, they were flat for the nine months ended September. At the current price of Rs 434, the company trades at 12 times estimated 2008 (December year end) EPS of Rs 36 and is attractively priced.
