MUMBAI (NewsRise) -- Sun Pharmaceutical Industries agreed to buy smaller rival Pola Pharma in Japan, as Indian drugmakers seek to create a niche in markets outside the U.S.
India's biggest pharmaceutical company said it plans to buy Pola Pharma, which is into research and development, manufacturing, sale and distribution of branded and generic products primarily in dermatology, for $1 million in equity, barring debt and cash. The deal is likely to be completed by January, it said without disclosing further details about the financial transaction.
"This acquisition is in line with our strategy to strengthen our global dermatology presence," said Kirti Ganorkar, executive vice president of Sun. The company expects the deal to help it launch its specialty and generic dermatology products in the Japanese market and also to gain access to the Japanese company's local manufacturing capability.
Pola Pharma, which had revenue of about $108 million and net loss of $7 million in 2017, has two manufacturing facilities in Japan with skills to make topical products and injectables. It also has research capabilities to develop new technologies and formulations.
Indian drug makers are taking concerted efforts to capture a share of the growing Japanese market worth $84.8 billion, accounting for about 7.5% of the global pharmaceutical industry. In 2016, Sun had bought a portfolio of 14 drugs from Novartis in Japan for $293 million. These brands had combined annualized revenues of about $160 million and addressed several medical conditions.
The latest acquisition comes as Sun and its rivals are facing intense pricing pressure in the U.S., the largest drug market in the world, where competition and consolidation among drug buyers is pushing prices down.
Smaller rivals such as Lupin have also been expanding their footprint in Japan. Earlier this year, Lupin struck a deal with Nichi-Iko to distribute and promote its upcoming biosimilar arthritis treatment Etanercept in Japan. The move marked Lupin's foray into the fast-growing market for cheaper versions of biotech drugs.
Shares of Sun Pharmaceutical lost 3.3% in Mumbai trading, while the benchmark S&P BSE Sensex closed 0.5% higher.
--Dhanya Ann Thoppil