US generics brighten Sun’s Q2, setting it on acquisition trail
Profit from operations for the three months ended September 30 was Rs2.5bn ($40.3m) with domestic sale of branded drugs growing 20 per cent to Rs4.47m. The star of the quarter however was Sun's US generics operations, the contribution from which increased 19 per cent to Rs8.8m
In particular, Sun said that a 195 per cent leap in quarterly sales generated by its Detroit-headquartered subsidiary, Caraco Pharmaceutical Industries, had provided it with a solid base of US operations.
The Indian drugmaker added that it has received US Food and Drug Administration (FDA) approval for 61 abbreviated new drug applications (ANDAs), ten of which were filed in the reported period.
Company chairman Dilip Shanghvi, told analysts that based on this aspect of its business Sun was seeking to further strengthen its position and is “scanning acquisition opportunities in the US, with the global financial meltdown resulting in more attractive valuations of generic drug companies.”
While Shanghvi provided few details about any potential US targets, he said that “Sun would look at businesses that would create additional value,” in an interview with the Hindu Business Line.
He did admit however that the firm’s US plans would be impacted upon by its long running dispute with Israeli acquisition target Taro Pharmaceutical Industries.
In August, the Tel-Aviv District Court found in favour of Sun and comprehensively rejected Taro’s contention that India firm should have submitted a “special tender offer” to proceed with the takeover.
At the time Shanghvi said that: “It is clear based on [the] ruling that the lawsuit by Taro's independent directors was part of a calculated effort by Barry Levitt to avoid living up to his obligations under the Option Agreement. It is time for Dr Levitt and his family to live up to the contract and do what is required of them under the Option Agreement."
Taro is currently appealing the Israeli court’s ruling putting a halt on the tender offer that Sun launched shortly after the decision was announced. Sun said that the deadline for the offer has already been extended until November 7 and will be pushed back again if such a move is required.
