Sun Pharma raises stake in US-based Pharmazz, stock flat

Sun Pharmaceutical Industries is investing up to $25 million in the US-based biopharmaceutical company Pharmazz, increasing its stake to approximately 22.7 percent on a fully diluted basis. This investment is part of Sun Pharma’s strategy to bolster its footprint in high-value specialty therapies, particularly in the fields of neurology and critical care.

However, the stock was trading flat at Rs 1688.70 in early deals on Monday. Market cap of the pharma firm stood at Rs 4.04 lakh crore. 

"This is to inform that Sun Pharmaceutical Industries Limited (together with its subsidiaries and/or affiliates referred to as “Sun Pharma”) has entered into an agreement with US based Pharmazz Inc., pursuant to which Sun Pharma has agreed to invest up to $25 Mn. The investment triggers conversion of earlier investment through SAFE resulting in aggregate stake of up to ~22.7% in Pharmazz on fully diluted basis," said Sun Pharma. 

Pharmazz is progressing with two significant drug candidates: Sovateltide, aimed at treating acute cerebral ischemic stroke, and Centhaquine, which addresses hypovolemic shock. Both medications have been approved in India and are marketed under the names Tyvalzi and Lyfaquin, respectively.

The U.S. Food and Drug Administration (FDA) has approved Phase 3 clinical trials for both drugs. Sovateltide has also received a Special Protocol Assessment (SPA) designation, providing a clearer path for its global development.

Sun Pharma plans to make this investment in several stages, starting with an initial $10 million investment and the conversion of SAFE notes by May 31, 2025. This will be followed by an additional $15 million by November 30, 2025, subject to certain conditions.

Furthermore, the agreement enables Sun Pharma to explore licensing rights for Sovateltide in select developed markets, while retaining exclusive rights in particular emerging regions.

This investment is part of Sun Pharma’s overarching strategy to expand its specialty product pipeline.