Sun Pharma to Expand Specialty Business Through Mergers and Acquisitions

Sun Pharma, India’s largest drug maker, plans to grow its specialty business by acquiring other companies and licensing new products, according to a senior executive.

Careful Strategy for Growth

“We’ve always been careful with mergers and acquisitions, using them to fill gaps in our portfolio and reach our strategic goals,” said Abhay Gandhi, CEO of Sun Pharma’s North America Business.

Strong Financial Position for Deals

“With nearly $2.4 billion in cash, including funds from Taro, we can pursue mid- to large-size deals,” Gandhi added.

Combination of In-House Development and Acquisitions

In recent years, Sun Pharma has focused on developing products in-house and plans to continue combining internal development with acquisitions.

Financial Strength Through Taro Merger

As of March 31, Sun Pharma had a net cash reserve of $2.4 billion, with $1.3 billion of that from Taro Pharmaceutical Industries, which has no debt.

Utilizing Taro’s Resources for Growth

Sun Pharma plans to delist and merge Taro, allowing it to use Taro’s cash for further growth.

Strategic Acquisitions and Licensing

Sun Pharma owns 78.48% of NYSE-listed Taro and is buying the remaining 21.52% for Rs 2,891.7 crore.

Focus on Specialty Drugs

Specialty drugs target severe, chronic, and rare diseases and often involve innovative delivery methods, making them complex to copy and more profitable due to patent protection.

Key Acquisition: Concert Pharma

Last year, Sun Pharma paid Rs 4,600 crore to acquire US-based Concert Pharma, gaining rights to Deuruxolitinib, a treatment for moderate to severe alopecia areata, a condition causing balding. There are few treatment options for this disease.

Investment in Specialty Drugs

Specialty drugs require significant investment in development, regulatory approval, marketing, distribution, and sales efforts.

Building a Specialty Business

Sun Pharma has built its specialty business through various licensing deals and acquisitions over the years.

Milestone Achievement in Specialty Sales

In FY24, Sun Pharma’s global specialty business, mostly driven by US sales, surpassed $1 billion in revenue.

Strong Growth in Specialty Segment

Specialty sales accounted for about 18% of Sun Pharma’s total revenue, growing 19% YoY to $1.04 billion in FY24.

Success with Ilumya

Among its specialty products, Ilumya (tildrakizumab), used for treating moderate to severe plaque psoriasis, generated $580 million in sales, growing 21.7% YoY in FY24.