Sun Pharmaceutical Industries Ltd (SUN.NS) will pay about $230 million for U.S.-based Dusa Pharmaceuticals Inc DUSA.O to gain access to the skin treatment market in the United States and complement the dermatology business of its Taro Pharmaceutical Industries Ltd (TARO.N) subsidiary.
Sun Pharma, India's top drugmaker by market value, draws nearly half of its sales from the United States but sales from Taro, its Israeli unit, have been driving profits in the world's biggest drug market.
"Dusa's business brings us an entry into dermatological treatment devices, where we see good growth opportunities," Sun Pharma Managing Director Dilip Shanghvi said in a statement on Thursday.
Dusa's Levulan combination therapy is approved by the U.S. Food and Drug Administration for treating non-hyperkeratotic actinic keratoses of the face or scalp.
BLU-U, another Dusa technology, is used to treat moderate inflammatory acne vulgaris.
"This acquisition will actually complement Taro's existing business, which has a strong dermatology product range," said Siddhant Khandekar, an analyst at ICICI Direct in Mumbai.
"This was the only area, a growing one, where Sun did not have products in the United States."
Sun, which has a market value of $13.3 billion, will make a tender offer $8 per share in cash for Dusa, a premium of 38 percent to Dusa's closing price on Wednesday.
Sun Pharma's shares have risen 40 percent this year, compared with a 20 percent rise in the Mumbai market index.
While big multinationals such as Abbott Laboratories (ABT.N) and Sanofi SA (SASY.PA) have been buying out Indian drug companies at high valuations, Sun Pharma remains one of only a few Indian drugmakers that has successfully acquired overseas companies and made profits.
Sun Pharma shares closed down 0.54 percent at 696.55 rupees. The company also announced that its net profit fell 46.5 percent in the second quarter.
(Editing by Roshni Menon and Ted Kerr)
Trending On Reuters
In a rare interview India's former PM Manmohan Singh criticised his successor Narendra Modi's government for failing to take advantage of lower commodity prices to propel economic growth and an inconsistent policy towards neighbour Pakistan. Full Article