Sun Pharma buys US drug maker

After its $3.2-billion acquisition of Ranbaxy, Sun Pharmaceuticals has announced a buyout of US-based Pharmalucence Inc.

The deal is expected to help Sun enter into the new area of radio pharmaceuticals and strengthen its presence in the injectable business in the US. Financial details of the deal are not known. Following the announcement, shares of Sun touched an all-time high of Rs 753 on the BSE, up 1.9 per cent intraday Wednesday. They closed at Rs 743.65 , up 0.7 per cent.

Pharmalucence was acquired by one of Sun’s US subsidiaries. A leading manufacturer of radio pharmaceuticals, it has developed a few injectables indicated for cancer treatment. It is engaged in contract and private label formulation development and manufacturing services of non-cytotoxic human injectables. In mid-2007, Pharmalucence was created via the management buy-out of CIS-US (incorporated in 1985 to commercialise medical applications from isotopic technologies, by three long-term employees, to become both a contract manufacturing organisation and a leading manufacturer of radio pharmaceuticals.

In 2011 and 2012, Pharmalucence received FDA approval for two new indications for its Sulfur Colloid product. Sulfur Colloid is used to assist in the localisation of lymph nodes, draining a primary tumor in patients with breast cancer or malignant melanoma.

Ranjit Kapadia of Centrum Broking said, "The new facility of Pharmalucence, which is awaiting FDA approval will give a boost for Sun’s presence in injectables." Pharmalucence’s 70,000 sq ft facility is claimed to be region's first contract manufacturing facility.

Sun Pharma, the largest Indian drug maker by value, was in the news after its all-share transaction to buy struggling Ranbaxy in the biggest pharmaceutical sector deal in the Asia-Pacific region in 2014. With the buyout, Sun became the world's fifth-largest maker of generic drugs. Last year, Sun was reportedly in discussion to buy Sweden’s Meda AB for $5-6 billion, to boost its generics business in developed markets.

For the year ending March, overall revenues of Sun were $2.7 billion, of which the US contributed $1.6 billion. In India, the company has strong presence in niche therapy areas of psychiatry, neurology, cardiology, nephrology, gastroenterology, orthopedics and ophthalmology.
DEAL DETAILS

• The deal is expected to help Sun’s entry into the new area of radio pharmaceuticals
• It would also strengthen the firm’s presence in the injectable business in the US
• Pharmalucence has developed a few injectables indicated for cancer treatment