India’s largest drug maker, Sun Pharmaceutical Industries, has completed its acquisition of US-based Checkpoint Therapeutics for approximately $355 million. This strategic move significantly strengthens Sun Pharma’s oncology and dermatology portfolio, aligning with its focus on high-value specialty therapies.
Despite the long-term strategic value, the market reaction on Friday surprised many, as Sun Pharma’s share price fell by 1.46% at the close of the week’s trading. This dip may have been driven by immediate concerns, including regulatory issues at a key manufacturing facility and the company’s cautious financial guidance.
Investors are closely monitoring developments—particularly the US FDA’s observations regarding Sun Pharma’s Dahej facility. The company’s financial performance in the coming quarters will also be under scrutiny as stakeholders assess the potential impact on its stock trajectory.
Strategic Rationale and Synergies of the Checkpoint Deal
Drug industry analysts believe the Checkpoint acquisition is a major strategic gain for Sun Pharma, which has historically grown through carefully chosen, high-potential acquisitions.
According to analysts at HDFC Securities, the deal aligns with Sun Pharma’s capital allocation strategy to strengthen its specialty business. Checkpoint’s Unloxcyt—a novel skin cancer drug—will serve as a complementary addition to its oncology portfolio.
In the post-Q4 earnings call, Chairman and Managing Director Dilip Shanghvi reiterated the company’s commitment to expanding its specialty business.
Sun Pharma’s specialty and innovative therapeutics division currently focuses on dermatology, ophthalmology, and oncology. Unloxcyt will complement existing products such as Odomzo (sonidegib) and Yonsa (abiraterone acetate)—both approved in the US—Nidlegy (awaiting approval in the EU), and the recently acquired Fibromun (in Phase III trials).
Other specialty molecules in development, including Ilumya (for psoriatic arthritis), GL0034 (obesity), MM-II (osteoarthritis), SCD-044 (atopic dermatitis/psoriasis), and Fibromun (for soft tissue sarcoma/glioblastoma), offer long-term growth potential. According to analysts, the Checkpoint acquisition is strategically significant for four key reasons:
1. Expansion into Onco-Dermatology
The acquisition brings Unloxcyt (cosibelimab-ipdl), the first FDA-approved therapy for advanced cutaneous squamous cell carcinoma (cSCC), into Sun Pharma’s portfolio. This positions the company at the forefront of immuno-oncology treatments for skin cancer—a rising concern due to increasing UV exposure and aging populations.
2. Global Commercialisation Potential
Unloxcyt’s US market potential is estimated at $1–1.6 billion annually, with a global opportunity projected at $40–50 billion. With Sun Pharma’s extensive global distribution network, the drug is well-positioned for rapid market penetration in the U.S., Europe, and beyond.
3. Financial Terms and Contingent Value Rights
Checkpoint shareholders received an upfront cash payment of $4.10 per share—a 66% premium over the last closing price—along with a contingent value right (CVR) of up to $0.70 per share, linked to Unloxcyt’s approval in select European markets.
4. Royalty Agreement with Fortress Biotech
As part of the deal, Fortress Biotech—Checkpoint’s controlling shareholder—will receive royalties on future sales of cosibelimab during a defined term. This replaces prior royalty rights previously granted to Fortress.
Market and Financial Impact
Following the announcement, Sun Pharma’s stock rose by around 2% on March 10, reflecting investor confidence in the deal’s strategic alignment. Analysts estimate that Unloxcyt could contribute up to 8% of the company’s FY26 revenue.
However, upcoming US price reduction measures, potential import tariffs, and regulatory changes under the new administration could pose risks to these projections. Nevertheless, Sun Pharma’s strategic pivot toward innovative and specialty therapies may provide a degree of insulation from these headwinds.
