Mumbai-based Sun, led by billionaire founder Dilip Shanghvi, 70, has completed detailed due diligence that lasted over three months and is now finalising a financing package before submission of a firm offer in the coming weeks. At least three global banks were mandated last week to back the bid, which will be the largest global M&A involving an Indian pharma major if it goes ahead.
ET BureauET on January 19 was first to report that India’s biggest drugmaker was evaluating Organon, a debt-ridden US company specialising in women’s health that was spun off from MSD (Merck Sharp & Dohme) in 2021. Sun was in negotiations with JPMorgan, MUFG and Standard Chartered Bank for financing, ET reported.
In January, Sun had made a non-binding offer before initiating due diligence.
Innovative Research
Citi is also going to join the financing consortium to back the all-cash offer, said the people cited. JP Morgan is Sun’s financial advisor and AZB is legal advisor.
However, Sun’s not the only contender. Two other global consortiums, one involving a buyout fund and another a combination of a strategic investor and a European buyout fund, are also competing for the company. Organon is working with advisor Morgan Stanley to find buyers for part of its business or the entire operation.
In recent months, Sun Pharma chairman Shanghvi has stressed the need for Indian drugmakers to move into innovative research for the next phase of growth and consider acquisitions to build scale, while keeping their generics lead intact.
Shares of Organon have fallen 19.06% in the year to date following a brief spurt in January after news of Sun’s bid became public. Its market cap in Thursday morning trade in the US was $1.52 billion. Sun Pharma closed Thursday with a market valuation of Rs 4.12 lakh crore ($44.30 billion).
Organon has been on Sun’s radar for a while now but a serious evaluation began last November end when the US company decided to sell its JADA post-partum haemorrhage (PPH) treatment system to Laborie Medical for up to $465 million as it sought to pivot from women’s health devices to renew its focus on the women’s health biopharma range.
“It’s been hot and cold even after January due to heightened global volatility. But in the last 10 days, Sun has yet again upped its tempo,” said an executive aware of the negotiations. “It’s a massive bet and it only makes sense if you are playing to win at such an advanced stage.”
Sun Pharma and Organon didn’t respond to queries.
Legacy woes
Organon inherited $9.5 billion of debt during the MSD spinoff and has been facing intense competitive pressure from global drugmakers as well generic suppliers in all three of its broad business segments–women’s health, biosimilars and the established products range, which includes cardiovascular drugs, respiratory and non-opioid pain, bone health and dermatology drugs.
The latest data show Organon reduced debt to $8 billion in calendar 2025. In comparison, Sun has about $3.2 billion (Rs 26,000 crore) of net cash on its balance sheet. The management has said it’s willing to utilise this to fund large acquisitions. In FY26, Sun Pharma clocked sales of Rs 52,000 crore—the US and India contributed almost an equal share of 31-33%. The rest is divided between other markets and active pharmaceutical ingredients (APIs).
Last year, Sun acquired Checkpoint Therapeutics for $355 million upfront and the deal value reaching $416 million. This gave Sun Pharma access to Unloxcyt, an anti-cancer drug. Sales from 11 of its innovative drugs grossed $1.21 billion in the US. Those include ophthalmology, hair loss, dermatology and anti-cancer drugs. Sun Pharma’s largest innovative drug in the US is Ilumya, for the treatment of plaque psoriasis, which saw sales of $681 million last year.
Strategic Rationale
Organon’s flagship brand Nexplanon, an etonogestrel implant, posted a 4% drop in 2025 sales to $921 million, primarily on account of reduced government funding in the US. Additionally, the impact of an investigation that alleged improper sales practices by the company also hit sales. Organon however expects to gain traction in the Latin American markets in the next few years.
In January, the US Food and Drug Administration (FDA) approved a supplemental Nexplanon that extends the use of the implant to five years from the earlier three years, brightening prospects for sales and staying in contention in the long-acting reversible contraception (LARC) market, which is dominated by Bayer, AbbVie, Pfizer and Ferring.
“This is a meaningful milestone for Organon and the Nexplanon brand as it potentially broadens the addressable market for this key product,” interim chief executive officer Joseph Morrissey told investors at Organon’s fourth-quarter and full-year earnings call in February.
In the biosimilars segment, Organon is likely to face additional competition as the US FDA in its draft guidelines recently limited the requirement of comparative efficacy studies for biosimilars. That may see smaller companies bidding for the same market as Organon on key drugs that treat breast cancers and auto-immune diseases. Organon told investors it will rely on picking the right partners for growth within the US while tapping other geographies.
In sales of established drugs, Organon is steadily recovering from the loss of exclusivity of its hit cholesterol drug Atozet. However, established drugs or the legacy product portfolio comprise the biggest chunk of Organon’s revenue, totalling $3.69 billion in 2025. The generic industry is fiercely competitive and could hurt Organon if cost efficiencies are not maintained. Indian drugmakers such as Dr Reddy’s, Sun Pharma, Zydus and Cipla are known to be the dominant forces in the US generics market.
