Indian drug maker Wockhardt has shut down its manufacturing facility at Morton Grove, Illinois, as part of its business restructuring in the US. The company expects the US plant shutdown and transfer of products from inhouse to third-party contract manufacturers to help save $12 million annually, while maintaining the sales run rate with a 40% gross margin.

A few products with high margin will be manufactured by third parties, the company said in an investor presentation. The US contributed about 13% to the company’s ₹1,973 crore revenue in the nine months ended December 31.

Wockhardt was incurring a fixed cost of $25 million annually to operate the Morton Grove plant.

The Mumbai-based drug maker also said it received 10 million from Serum Institute of India (SII) for reserving capacity of 150 million vaccine doses over 15 years. SII has identified two vaccines for manufacturing in partnership with Wockhardt.

The two companies had formed a joint venture for vaccine manufacturing at a UK facility. Wockhardt has a 51% stake in the JV.

The company said it plans to manufacture the vaccine doses after regulatory approvals and exhibit batches in the next 8-12 months.

Wockhardt promoters Habil Khorakiwala and his family have said that they were fully committed to support the company through conversion of the promoter debt of ₹500 crore to equity through a rights issue. Its long-term external debt, which was precarious in 2017 at ₹3,218 crore, has dropped to ₹608 crore as of December 2022.It has been focusing on improving profitability and cash flows. It sold a major chunk of its domestic formulation business in 2020 to Dr Reddy’s Laboratories for ₹1,850 crore. It is also banking on novel antibiotic portfolio, expecting approvals of leading molecule, Emrok, in eight emerging markets in the next 6-9 months.