Comments
The stocks of Dilip Shanghvi-promoted drug major Sun Pharma and research arm Sun Pharma Advanced Research Company (SPARC) have gained about 13 per cent and 16 per cent this week. The strong performance was primarily on account of two developments.
One, drug discovery and research firm SPARC on Wednesday announced approval of its new drug Elepsia XR (extended release), an anti-epileptic drug, by the US drug regulator (Food and Drug Administration). The drug is an improvised version of US-based UCB Pharmaceuticals’ Keppra.
According to SPARC, the drug, which will be manufactured using its proprietary Wrap Matrix technology, has been proved to be less toxic and at the same time more efficient than Keppra. The formulation comes with multiple layers of the active ingredient, which is released into the body as and when required.
SPARC, which owns the technology and the product patent, will leverage Sun Pharma’s large distribution network in the US to sell this drug. However, Elepsia XR being a novel drug, switching prescriptions from the off-patent Keppra may take some time. Elepsia XR’s peak revenue is expected to be around $50 million.
Two, Sun Pharma on Tuesday announced acquisition of GSK’s opiates business in Australia. This acquisition will help Sun Pharma gain a foothold in the Australian controlled-substances market and enable the company to leverage GSK’s product basket of poppy-based opiate raw materials, which are used in analgesics class of painkillers. GSK’s active pharma ingredient (API) manufacturing facilities at Latrobe (Tasmania) and Port Fairy (Victoria), can cater to Sun Pharma’s controlled substances business in the US. Though the deal value has been kept under wraps, it is estimated to be around $200 million. The transaction, which is expected to close by August this year, will likely add $75 million to Sun Pharma’s revenues.
Sun Pharma is a leading player in the US’ controlled substances market. The acquisition of an Hungarian API plant along with its poppy farm in 2005, marked the company’s entry into controlled substances. In 2008, the company expanded its presence in this product segment by acquiring the US-based Chattem Chemicals. Acquisition of GSK’s opiates business will strengthen Sun’s position in the controlled substances space.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.