A release by Sun Pharma on Tuesday says that the current GSK Opiates business, including related manufacturing sites in Latrobe (Tasmania) and Port Fairy (Victoria) in Australia and its portfolio of opiates products along with inventory, will transfer to a subsidiary of Sun Pharma.
Analysts feel this is a continuation of Sun's approach to acquire competence in controlled substances.
Indeed, this is its fourth acquisition in the space. While the company has not disclosed any numbers related to the deal or its controlled substances business, analysts see significance in the location. The island state of Australia is considered one of the major suppliers of narcotics raw material to the world. It is a key reason why a lot of painkillers like morphine and codeine are sourced from Tasmania.
Clearly, then, the acquisition makes business sense for Sun Pharma. The company has not been able to grow its controlled substances portfolio significantly, according to some analysts.
In 2005, Sun Pharma had acquired a facility in Hungary authorised to make controlled substance APIs (active pharmaceutical ingredients or bulk drugs), starting from the initial stage of poppy farming.
In the same year, the company acquired a brand new manufacturing site in New Jersey for the manufacture of controlled substances finished dosages.
In 2008, Sun Pharma announced that its fully owned US subsidiary, Sun Pharmaceutical Industries Inc., had acquired 100 per cent ownership of Chattem Chemicals Inc. from Elcat Inc, registered with the US Drug Enforcement Administration (DEA) and a narcotic raw material importer. This made it Sun Pharma's third acquisition of a controlled substance business.
In a note released by the company after its 2008 acquisition, Sun Pharma's founder Dilip Shanghvi had said, "This acquisition reflects our strategic resolve to be a more active player in the pain management segment in the US."
The Sun Pharma stock was trading at Rs 943, up two per cent, at around 3 pm on Tuesday on the Bombay Stock Exchange.
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