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Sun Pharma arm buys Chattem Chem

BS Reporter  |  Mumbai 

Dilip Shanghvi

Sun Pharma today announced that its wholly-owned US subsidiary, Sun Pharmaceutical Industries, has acquired full ownership of Chattem Chemicals from Elcat. Chattem is registered with the US Drug Enforcement Administration (DEA) as a narcotic raw material importer.

The terms of the transaction were, however, not disclosed. The company will apply to regulatory authorities for appropriate clearances, Sun Pharma said in a statement this evening. The import registration includes four controlled substance products listed — methamphetamine, phenylacetone, raw opium and concentrate poppy straw.

It is also licensed by DEA to manufacture schedule 1 to 5 controlled substances. At its facility spread in Chattanooga, Tennessee, Chattem employs 60 people and manufactures a variety of active pharmaceutical ingredients (APIs) with a focus on controlled substances. For the year ended June 2008, Chattem is estimated to have sales of $26 million.

This is Sun Pharma’s third acquisition of a controlled substance business. In 2005, Sun Pharma acquired a facility in Hungary authorised to make controlled substance APIs, starting from the initial stage of poppy farming. In the same year, it had also acquired a new manufacturing site in New Jersey, equipped with special suites for the manufacture of controlled substances finished dosages.

“This acquisition reflects our strategic resolve to be a more active player in the pain management segment in the US,” Sun Pharma Chairman & Managing Director Dilip Shanghvi said in a statement.

In 1995, Elcat had acquired the chemicals division of Chettam. Under terms of the agreement, Chattem was to be paid $25 million, consisting of $20 million in cash and $5 million of convertible preferred instrument. The cash proceeds was to be used to reduce debt.

First Published: Wed, November 26 2008. 00:00 IST