Sun Pharma plans to acquire oral and injectable business to grow capacity

Sun Pharmaceuticals Industries Ltd, Asia’s largest generic drugmaker by market value, in its bid to grow business faster than its competitors, is looking to acquire makers of injectable and oral liquid medicines, among others.

“My objective will be to find a way to grow the business faster than the competition. Apart from oral and injectable business, the Indian manufacturer of antibiotics to cancer drugs may also buy producers of branded ophthalmology products,” said billionaire managing director Dilip Shanghvi in an interview to Bloomberg.

According to Shangvi, the company is looking to focus on identifying products which will allow it to operate in limited competition markets. This year, the company was planning to acquire Swedish drugmaker Meda AB, sources told Bloomberg.

“Sun, which evaluates three to four acquisition targets every month, isn’t close to announcing any deal,” Shanghvi said.

Shangvi’s strategy to build on a streak of 11 deals since 2001 may help the company to achieve its goal of expanding in Europe and Japan and increasing sales in the US, the company’s biggest market.

This comes at a time when its Indian rivals Ranbaxy Laboratories Ltd and Wockhardt Ltd. are struggling to address the US regulator’s warnings on manufacturing practices.

“The company, which acquired a stake in Israel’s Taro Pharmaceutical Industries Ltd in 2007, is open to borrowing overseas to fund any purchase, and may sell shares if it’s a very large acquisition,” Shanghvi said.

The company is seeking to add products and technologies that it currently does not have and is targeting 18 to 20 per cent growth for the year ending March 31.

Shanghvi’s purchase of Taro helped Sun boost its share of US revenue to 54% of group sales and resulted in Taro returning to profit in 2007. Shanghvi, who ended his effort to buy the rest of Taro earlier this year, said he has no plan to attempt to increase the stake for now.

“Sun had 320 drugs approved for sale in the US, and had another 133 product applications, known as Abbreviated New Drug Applications or ANDAs, pending with the US Food and Drug Administration at the end of June,” Shanghvi said in a call with analysts on August 9. “Generic drugmakers have to file an application for each drug they seek to manufacture for the US.”

Sun Pharma’s strategy to grow business on the back of acquisitions has stayed concurrent with its earlier strategy. The company has been actively scouting for opportunities and acquiring players. Its acquisitions include purchasing US-based specialty pharmaceutical company DUSA Pharma for $230 million and Delhi-based pharma manufacturer Ochoa Labs for $5.4 million in 2012. Its earlier acquisitions include Caraco Pharma, Chattem Chemicals and Able Laboratories.

(Edited by Joby Puthuparampil Johnson)

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