Police have laid a murder charge over what they say was a drug deal gone wrong, as they search for a second man to help investigate a “gruesome” homicide.

Officers found a man, believed to be aged 29, stabbed to death about 5pm on Monday at Croydon Park, in Sydney’s inner-west.

Mohammad Sofwan Bin Mustafha, 32, was arrested at the scene and taken to hospital under police guard for assessment. He was later charged with murder and faced Burwood Local Court on Tuesday.

He did not apply for bail and will return to the same court on July 30.

Another man is being sought by police in relation to the incident.

Police released images of this man on Tuesday, saying he was last seen on the street where the stabbing occurred.

The man charged with murder had attempted to flee the crime scene when police attended but was quickly apprehended, Superintendent Christine McDonald said.

“This is a gruesome crime,” she told reporters on Monday evening.

“The man’s injuries are horrific, and what we know from very preliminary investigations is that … we believe this is a drug deal gone horribly wrong.

“We didn’t give him any time to run away, we were here too quick.”

On Tuesday morning, police were crawling over the quiet street as they attempted to piece together what happened.

The victim, who has not yet been formally identified, was found with multiple stab wounds to his neck.

Police were unsure of who lived at the house, who had attended before the fatal incident and the reason they were meeting, Supt McDonald said.

She did not detail why police believed the incident had stemmed from a drug deal.

“We don’t believe it to be domestic-related, we don’t believe it to be gang-related, but we need to work through all those steps of the investigation,” she said.

“The community down here would be shocked that something … so brutal has happened in their street.”

-AAP