Sun Pharma to acquire 85% stake in Russia’s Biosintez for $60 million
Posted on: 24 Nov 2016 09:37:13
24 November 2016 Current Affairs: India’s largest drug maker Sun Pharma, facing an uncertain US market over pricing issues, launched an attempt to move into emerging markets and announced has the acquisition of Biosintez, a Russian company making and marketing pharmaceutical products in the Common Wealth of Independent Countries.
Sun Pharma picked up 85.1% of the company for US$ 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 .
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.
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% yearon-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.
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