Wockhardt Comeback Sets Up Drugmaker as Target: Real M&A – Bloomberg

For acquirers willing to look past U.S. punishments for quality and hygiene violations at two plants, Indian drugmaker Wockhardt Ltd. (WPL) is offering the prospect of a return to revenue growth next year.

The Mumbai-based maker of almost 1,000 treatments worldwide has said it is addressing concerns raised last year by the Food and Drug Administration, the U.S. agency that banned sales of drugs from two of Wockhardt’s Indian factories and questioned the accuracy of laboratory records. Revenue, which took a hit after the U.S. action, is projected to rebound to almost $1 billion in 2017 as Wockhardt rolls out new products at home.

The $1.3 billion company already attracted the attention of Lupin Ltd., its Mumbai-based rival. Wockhardt could also appeal to a large generic drugmaker or an international pharmaceutical company looking to acquire a domestic business in India, Antique Stock Broking Ltd said. Logical suitors include Mylan Inc. and Actavis (ACT) Plc, according to IDFC Securities Ltd.

“What’s attractive about this company, in spite of the import alerts, is its presence in India, the U.S. and Europe,” Prakash Agarwal, an analyst at CIMB Securities India Pvt. in Mumbai, said by phone. Wockhardt’s research and development team is also a strength, Agarwal said.

When FDA inspectors arrived in March 2013 at Wockhardt’s factory at Waluj, in the western Indian city of Aurangabad, they found open toilet drains and stagnant urine near the entrance to the sterile manufacturing facility. Wockhardt said Aug. 12 that U.S. revenue fell 60 percent in its fiscal first quarter ended in June following the FDA’s sales bans.

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