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Sun Pharma to acquire Russia’s Biosintez Posted 09/12/2016

Sun Pharmaceutical Industries (Sun Pharma) announced on 23 November 2016 its acquisition of Russian pharmaceutical company JSC Biosintez at a cost of US$24 million, demonstrating the company’s commitment to the Russian market.

Sun Pharma, the world’s fifth largest speciality generic pharmaceutical company and India’s top pharmaceutical company, provides medicines to patients in over 150 countries. The company recently announced a distribution pact in Japan [1] and now outlines an agreement to acquire approximately 85% of Biosintez, a Russian pharmaceutical company focused on the hospital market.

The company, which brought in revenue of over US$50 million in 2015, has a manufacturing facility in Penza, southeast of Moscow, with the capacity to manufacture a wide range of dosage forms including blood preservatives, tablets, ointments, gels, injections and active pharmaceutical ingredients (APIs). The company supplies Russia and the Commonwealth of Independent States (CIS) region, a collection of nine countries including Armenia, Belarus and Kazakhstan.

According to Sun Pharma, the acquisition is part of the company’s initiative to strategically invest in emerging markets and will provide access to local manufacturing capability in Russia. They hope it will allow them to better serve the Russian pharmaceutical market, which recorded sales of around US$10 billion and growth of 7.4% during 2015. Emerging markets like Russia have become more important for large companies like Sun Pharma, due to strict regulation in the US market.

The move is also in line with ‘Pharma 2020’, an initiative launched by President Vladimir Putin in 2011 that requires companies who want to sell pharmaceuticals in Russia to produce them locally. The initiative aims for Russia to produce half of all the drugs it uses, and 85% of those considered essential, by 2020.

Several pharmaceutical companies have been focusing on Russia, despite its recently weakened economy. Teva Pharmaceutical Industries for example recently announced completion of a sterile injectables manufacturing plant in Kirov with Russian partner Nanolek, while Pfizer has announced plans to build a manufacturing plant in Kaluga, a city southwest of Moscow, with NovaMedica.

The transaction is due to complete by the end of 2016, subject to the approval of the Russian Federal Anti-Monopoly Service and certain closing conditions. As part of the takeover Sun Pharma will assume a debt of around US$36 million.

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Reference
1. GaBI Online - Generics and Biosimilars Initiative. Sun Pharma announces Japanese distribution pact with Mitsubishi Tanabe [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2016 Dec 9]. Available from: www.gabionline.net/Pharma-News/Sun-Pharma-announces-Japanese-distribution-pact-with-Mitsubishi-Tanabe

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Source: Sun Pharma

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