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Sun Pharma In The News

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Sun Pharma pushes to expand reach beyond the US and Europe


The firm has identified at least seven nations for the first phase of its new emerging markets initiative
Three years short of clocking its third decade in existence, Sun Pharma has appointed a Chief Executive to help co-steer the over Rs 4,000 crore drug-maker through transi'tion and expansion into more international landscapes.
T he country's largest drugmaker by value, Sun Pharmaceutical In'dustries Ltd, is making a push to enter regions outside the US and Europe, the export mar'kets that Indian pharma firms traditionally focus on.
The company took a beating in the US after its acquired subsidiary Caraco Pharmaceu'tical Laboratories Ltd was served with a non-compliance action by the US Food and Drug Administration in 2008.
It has now identified at least seven countries'Russia, Chi'na, Brazil, Mexico, Korea, South Africa and Japan'for the first phase of its new emerging markets initiative, said a company executive, who didn't want to be identified.
The drug markets in these countries are collectively esti'mated at around $60 billion (Rs2.68 trillion), global drug retail researcher IMS Health said in a January report.
Sun Pharma currently gets nearly 9% of its total sales from these markets. Recently it ac'quired manufacturing facilities in Mexico and Brazil.
A spokesperson for Sun Pharma said the company's new CEO S. Kalyanasundaram will take charge of the focus markets, apart from India.
Kalyanasundaram, who was head of commercial excellence for Asia-Pacific at the world's second largest drug maker GlaxoSmithkline Plc, joined Sun Pharma on 1 April. He was earlier managing director of GSK India.
"The local facilities in Mexi'co and Brazil are small and lo'cal market specific. There, the company will follow a mix of local production and exports from India as per the market dynamics," said the spokes'person. He didn't give details of the investments made for these acquisitions.
"It is the need of the hour for Sun Pharmaceuticals to look at new markets as its recovery in US sales may take an indefinite time as Caraco faces serious compliance issues," said Ranjit Kapadia, vice president (insti'tutional research), HDFC Secu'rities Ltd.
Even otherwise, a geograph'ical shift is imperative for Indi'an drug makers as even well-regarded markets in Europe are turning more price sensi'tive, said Kapadia. Margins from these markets are likely to shrink further, he added.
"Sun has not been there in many of these emerging mar'kets till now," Kapadia said.  
"But it seems serious about these non-traditional markets now and the appointment of Kalyanasundaram as chief ex'ecutive with charges of these markets will help a lot to strategize these businesses as he has so much of experience in these geographies."
Muralidharan Nair, partner, lifesciences practices, at advi'sory firm Ernst and Young, said the market for branded generic drugs in the new focus coun'tries presents high profit and growth opportunities, even at low volumes.
This new strategy for Sun, which is fighting a legal battle to take over Israeli drug maker Taro Pharmaceutical Indus'tries Ltd, is in line with chang'es in the world pharmaceutical market.
IMS Health had in 2006 pre'dicted a shift away from coun'tries such as the US, the UK, France, Germany, Italy, Spain and Canada to a set of "pharmerging" markets.
It had estimated that China, Brazil, Russia, India, Mexico and other such nations would represent 12% of the world drug market by 2011 and con'tribute close to 20% of global pharma growth by then.
Sun Pharma shares fell 1.36% to close at Rsl,773 on Thursday on the Bombay Stock Exchange. The Sensex closed 255.62 points, or 1.42% down at 17,714.40.