Asked about the strategic priorities in the US, he added: “Not only the US, but we have interest in selling innovative medicines globally… for emerging markets we are looking at tuck-ins or smaller acquisitions which we can look at integrating with our existing business to get scale in the emerging markets.” Shanghvi added.
He was responding to an analyst’s query on the company’s M&A strategy over an earnings call after Sun Pharma announced its third-quarter results. “Our focus is on finding a way to grow our business organically at a rate so that we continue to be an attractive investment opportunity for shareholders,” he said.
Shanghvi added the company is evaluating the biosimilars space and geographic expansion in emerging markets while bolstering the importance of North America in its strategy. “US continues to be an important part of our focus, specifically for innovative medicines.
The comments come amid recent media reports around the company’s acquisition interest.
ET had first reported in January that Sun Pharma had submitted a non-binding offer to acquire US-headquartered Organon, citing people in the know. Sources had also said the company tied up acquisition financing in the form of bridge loans from at least three global banks – from Wall Street, Europe and Japan – amounting to $10-14 billion, to demonstrate commitment to Organon’s board.
However, Sun Pharma has maintained that the reports are speculative.”In recent weeks, there have been speculations in the media regarding Sun’s M&A interest in certain companies. We have clarified to exchanges that the news is speculative in nature,” a senior company official said during the earnings call.
On the potential size of future acquisitions, Shanghvi stressed financial prudence. “We need to be confident that whatever acquisitions that we make we should be able to manage effectively without diluting focus on our own growth. At the same time, for acquisition, we have indicated that, if necessary, we are comfortable raising debt… It depends on the targets, cash flow profile, our confidence that we can repay,” he said.
On biosimilars, he said, “We are evaluating relooking at opportunities comprehensively – including setting up of manufacturing investment, overall cost of development and the time for the investment to produce any kind of meaningful return. We are evaluating everything to make a decision.”
