93% Crash To 1000% Surge: How A Rare Drug Discovery In A Rs 82,000 Crore Market Rescued An Indian Pharma Giant

Two decades ago, Wockhardt was among the top 10 pharma companies in India, and its founder, Habil Khorakiwala, was ranked 19th among the richest Indians in 2004. The growth was driven by acquisitions across France, India, and the UK. However, the debt-fuelled expansion that supported Wockhardt’s rise later pushed it toward the brink.

In 2009, the company defaulted on its debt payment and was downgraded by rating agencies. For the next decade, it survived through asset sales and restructuring as revenues stagnated, losses continued, and cash flow stayed negative.

Wockhardt’s stock price fell 93% from Rs 2,169 in March 2013 to Rs 145 by March 2023. Yet even in this period, Khorakiwala and his scientists continued their focus on drug discovery. A programme started in 2011 to develop Zaynich has now reached a key milestone.

The US FDA has accepted the company’s New Drug Application for its antibiotic Zaynich, marking a first-of-its-kind moment for Wockhardt and for India’s pharma industry. The market has rerated the stock, with Wockhardt’s share price rising ten times from its 2023 low to Rs 1,450.

The question now is how the company is positioned with Zaynich at the centre of its strategy.

In 2019, 49 lakh deaths were reported due to antimicrobial resistance. Zaynich addresses this global threat, where existing treatments are insufficient. This aligns with a public-health priority and an unmet medical need.

Zaynich’s development began with a young cancer patient in the US who was battling a chronic thigh infection caused by drug-resistant (Pseudomonas). The infection had resisted treatment for more than nine months. Doctors sought access to Zaynich under compassionate use, which allows patients with life-threatening illnesses to receive investigational and unapproved medicines outside clinical trials.

After four weeks of treatment, the patient was cured, as reported by Wockhardt in June 2024. As of March 2025, 51 patients have received Zaynich under compassionate use, with a reported success rate above 95%.

This real-world data supports the drug’s clinical trial results, which showed 20% superiority over Meropenem in a global phase 3 trial. This level of clinical superiority is among the highest reported for newly developed antibiotics, giving Zaynich a competitive edge.

Zaynich also received a susceptibility breakpoint of 64 mg/L from the Clinical and Laboratory Standards Institute in the US, compared with the 2–8 mg/L range for recent antibiotics. The high breakpoint indicates efficacy in treating drug-resistant and critically ill patients.

However, Zaynich is not a mass-market drug. It is targeted for severe multidrug-resistant infections, which can limit overall volume.

According to Khorakiwala, Zaynich is one of the few novel antibiotics discovered in the last five decades. The breakpoint is also the highest given in the US in the last 100 years. With this efficacy, the US FDA granted Zaynich Qualified Infectious Disease Product status.

This designation means Zaynich addresses an unmet medical need, making it eligible for fast-track and priority review and a five-year extension of US market exclusivity. The drug has also received Breakthrough Medicine designation in Saudi Arabia.

Zaynich is positioned as a destination therapy, supported by premium positioning, high market prices, and revenue potential. Wockhardt estimates the total addressable market across the US, Europe, and India at nearly $9 billion (Rs 81,000 crore).

The patient pool in these markets is close to 20 lakh cases a year. India accounts for 11.1 lakh cases, translating into a TAM of about Rs 18,000 crore. The US (1.6 lakh cases) and Europe (2.1 lakh) together represent a TAM of roughly Rs 63,000 crore.

Wockhardt already has a presence in these markets. In FY25, the UK accounted for 39% of revenue, followed by India and emerging markets (23% each), and the EU (12%).

In India, Wockhardt filed a New Drug Application in March 2025, with approval expected in early FY27 and a commercial launch by mid-FY27. In the US, the FDA accepted the NDA for Zaynich, the first NDA approval for a new chemical entity from an Indian pharma company. The company expects approvals by mid-FY27 and a launch in the same year. In Europe and other emerging markets, filings are planned for the second half of FY26.

Wockhardt is preparing for commercial rollout. In India, it has set up a field force, targeting 80,000–100,000 patients within three years. For global markets, the company may commercialise either through its own organisation or through licensing. The US market will be supplied from European facilities, while India and emerging markets will be supplied from domestic manufacturing.

Beyond Zaynich, Wockhardt’s second antibiotic, Mikanef, has been approved and launched in India, targeting the respiratory tract infection market valued at Rs 10,800 crore. Its diabetes biologics portfolio is expected to be another driver, with a market size of about Rs 27,000 crore.

The company plans to double its capacity in this segment over the next 24 to 36 months. The capacity expansion is expected to support 20–25% growth in the biotechnology business. Together, Mikanef and Zaynich’s commercialisation are expected to lift revenues. Management aims to double total revenue over the next three years.

With operating leverage, profitability and cash flow are expected to improve. The balance sheet, once leveraged, has strengthened. As of 31 March 2025, net debt stood at Rs 64 crore, with a debt-to-equity ratio of 0.1x. Cash and cash equivalents rose to Rs 615 crore, supported by a Rs 1,000 crore qualified institutional placement in FY25.

Although the company remains loss-making, operational profitability is improving. In FY25, revenue rose 7.6% to Rs 3,012 crore, while EBITDA rose 67% to Rs 418 crore. Margins expanded to 14% from 9% in FY24. The company posted its first profit of Rs 82 crore in Q2 FY26 after several years of quarterly losses.

After a sharp rerating, Wockhardt now trades at an EV/EBITDA of 50x. The high valuation partly reflects current profitability. If EBITDA improves with Zaynich’s launch, valuation multiples may moderate. This makes execution and commercialisation important factors to track.