Sun Pharmaceutical Industries, India’s largest drug manufacturer, is set to pursue licensing agreements and acquisitions to bolster its specialty business, according to senior executive Abhay Gandhi. “We have always been judicious in using M&A and licensing to fill portfolio gaps and achieve strategic goals,” said Gandhi, CEO of Sun Pharma’s North America Business, at a recent press conference.
Gandhi emphasized that Sun Pharma’s substantial cash reserves, which total nearly $2.4 billion including Taro Pharmaceutical Industries’ assets, position the company well for mid- to large-size transactions. He noted that Sun Pharma has been focusing on developing its pipeline of products in-house, but moving forward, the strategy will be a blend of mergers and acquisitions (M&A) and internal development.
As of March 31, Sun Pharma reported a consolidated net cash position of $2.4 billion, with Taro holding $1.3 billion of this amount and carrying zero debt. The impending delisting and merger of Taro with Sun Pharma will enable the Mumbai-based pharmaceutical giant to leverage Taro’s cash for further expansion. Sun Pharma currently owns 78.48% of the NYSE-listed Taro and has announced plans to acquire the remaining 21.52% stake for ₹2,891.7 crore.
Gandhi acknowledged that developing and commercializing specialty drugs requires substantial investment and is fraught with challenges. Companies must commit significant resources to clinical development, regulatory approvals, brand building, distribution, payer coverage, and sales force expansion to encourage prescriptions. Additionally, the threat of competition from generic alternatives always looms.
Sun Pharma has built its specialty business through a series of strategic licensing deals and acquisitions over the years. In FY24, global specialty sales contributed approximately 18% of the company’s revenue, reaching $1.04 billion, a 19% year-on-year increase. A key driver of this growth was Ilumya (tildrakizumab), a treatment for moderate to severe plaque psoriasis, which alone reported sales of $580 million, growing at 21.7% year-on-year in FY24.
Sun Pharma’s continued focus on strategic M&A and licensing, coupled with its strong cash position, aims to sustain and enhance its growth trajectory in the competitive specialty pharmaceutical market.