MUMBAI: India’s largest drug maker Sun PharmaBSE -0.90 %, facing an uncertain US market over pricing issues, launched an attempt to move into emerging markets and announced on Wednesday the acquisition of Biosintez, a Russian company making and marketing pharmaceutical products in the Common Wealth of Independent Countries.
Sun Pharma picked up 85.1% of the company for US$ 24 million and also the debt of approximately US$ 36 million as part of the transaction. Biosintez is a Russian pharmaceutical company focusing on the hospital segment with annual revenues of approximately US$ 52 million for 2015, the company said.
It has a manufacturing facility in Penza region with capabilities to manufacture a wide variety of dosage forms including pharmaceuticals for injections, blood substitutes, blood preservatives, ampoules, tablets, ointment, creams, gels, suppositories, and APIs.
“This acquisition is consistent with Sun Pharma’s philosophy to invest in strategic Emerging Markets. This transaction gives us access to local manufacturing capability across multiple dosage forms in Russia, enabling us to serve the Russia pharmaceutical market more effectively,” said to Aalok Shanghvi, Head of Emerging Markets, Sun Pharma.
Emerging markets have become a much-needed growth driver for large companies like Sun Pharma and Dr. Reddy’s who have been reeling under regulatory flak in US markets for quality issues and price hikes. The acquisition in Russia also comes as part of the mandatory 2020 plan of localization in Russia that stipulates companies to have a local base in the country.
Though hit by the currency fluctuation, the $10-billion Russian market is a pull for Indian drug companies. For the quarter ended September 2016, Sun Pharma consolidated profit was up 90.2% year-on-year to Rs 2,471 crore in the quarter ended September 2016, Sun Pharma’s manufacturing units at Halol is under investigation from the USFDA, besides the Department of Justice that is looking at price hikes by generic companies. On Wednesday, Sun pharma’s shares rose 1.64% to close at Rs 701, though a year ago the shares of Sun Pharma were trading at Rs 718 around the same date.
