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Sun Pharma In The News

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Sun Pharma chief sees more consolidation ahead

SUN Pharmaceutical's investors saw light at the end of the tunnel after the company said a New York district court had dismissed a complaint filed by Taro Pharmaceuti'cal Industries to block Sun's tender of'fer to mop up the Israeli company's outstanding shares.

 
The ruling is a boost to the Mum-bai-headquartered Sun that has been locked in a three -year battle to acquire Taro. The two companies have been at loggerheads since Sun struck a deal in 2007 for its unit ' Alkaloida Chemi'cal Company Exclusive Group ' to take control of Taro for $454 million (approximately Rs 2,116 crore), or $7.75 a share (Rs 361.27).
 
Against the backdrop of Ran-baxy promoters selling out their entire stake and Piramal Healthcare selling its domestic formulations business last veek, Sun Pharma's Chairman and Managing Director, Mr Dilip Shanghvi, sees more con-solidation in the local andscape.
 
"In a way, it will be good for us," as Sun would compete with companies "that have marketing ethics and business polices similar to ours", he said, responding to an analyst query. It is a process of transi'tion, as international compa'nies are seeing growth from emerging markets, and India being a component of this mar'ket, it paves the way for more consolidation and tie-ups, he added.
 
OUTLOOK
on the Rs 4,100-crore Sun Pharma's growth projections for the year, he said, the com'pany looks at an 18 to 20 per cent growth, despite challeng-es in the US market, including he recent ruling disallowing the company from selling leart-burn drug Protonix. The year under review was significant, as the US faced un'precedented challenges and revenues took a hit as a result. Nevertheless, rest of the busi'nesses continued, he added.
 
US CHALLENGES              
Sun Pharma has stopped sell'ing Protonix (generic panta-prazole) in the US, despite being confident on its litiga'tion, due to "abundant caution", he explained. On the other US challenge, facing its subsidiary Caraco, he said: "The plant was on its way to being compliant with the GMP (good manufacturing practice) norms and the revival plan had got the approval of the Food and Drug Administration."
 
Consultants had been engaged for the purpose and work plan for the plant had been sub'mitted to the regulator, he said.
 
Caraco's Michigan facility had come in for the stick in June last year, regarding com'pliance issues, but Mr Shangh'vi hoped the issue would be resolved this year.
 
RESEARCH SPENDS
Sun Pharma's research spends for the year ended March 2010 was Rs 247 crore. The spending is tipped to revert to the high of 7-8 per cent of sales, he said, in the expectation that research spending would resume at its Cranbury and Caraco sites this year. With 600 scientists, Sun Pharma's patent library has 245 patents, Mr Shanghvi said, 79 of them approved.
 
Having made its $454-mil-lion proposal to acquire Taro about three years ago, Sun still awaits audited financials for 2007/08 and 09 of the Israeli generics company, he said. The two companies are locked in li'tigation and Sun still awaits the Israeli Supreme Court's verdict, he said.
 
NET DIPS
Sun Pharma's consolidated net profit saw a 26 per cent dip at Rs 1,351 crore for the year end'ed March 31, 2010, compared with Rs 1,817 crore in the previ'ous year. Net sales stood at Rs 4,103 crore, down from the previous year's Rs 4,272 crore.
 
On Sun Pharma's perform'ance, the Chief Executive, Mr Kal Sundaram, said that do'mestic formulations, account'ing for about 45 per cent of sales, comprised brands such as Pantocid that became a Rs 100-cfore brand, besides five- six brands that were in the range of Rs 50 crore and growing