The Hindu Business Line : Sun Pharma eyes tie-ups in Europe

DRUG major Sun Pharmaceuticals Industries Ltd is looking to ink partnerships in the European market to fuel its next level of growth in the international arena. The company, however, has dropped its plans to raise funds of about $350 million through a foreign currency convertible bond issue.

The international environment is not conducive to raise funds and so the company is putting its plans on hold, Mr Dilip Shanghvi, Sun Pharma's Managing Director, said during a conference-call recently to discuss the company's first quarter results.

The current environment makes it "difficult and expensive for transaction," he told Business Line and added "should the situation change dramatically over the next few months, we would look at it."

On plans for the international market, he said, "Europe presents interesting opportunities and we would be undertaking drug filings in this market out of India. We are looking at partnerships with European partners," he said.

The US market too continues to be "interesting", he said, despite competition on prices and the practice of authorised generics, where innovator companies allow others to make copies of specific drugs.

To support the company's domestic and export plans, an investment of about Rs 100 crore has been earmarked towards beefing up capacity. A bulk of the amount would go into capacity expansion at Sun Pharma's facilities in Panoli and Ahmednagar, part of it would also go towards Sun's Halol plant, that had received US regulatory approval in the quarter under review. An estimated Rs 15 crore would be infused into the cephalosporin bulk active plant that comes into the Sun fold, through its merger with Phlox Pharma. Part of the funds would also go towards upgrading machinery in other facilities belonging to Sun Pharma, officials said.

"The company has been generating cash every year, so funding the expansions will not be a problem. The company would look at external commercial borrowings or domestic funds to support plans, only if required," Mr Sanghvi said.

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