Sun Pharma to spin off domestic formulations business into Sun Resins & Polymers

Sun Pharma, India's largest-drug maker by market value, yesterday said that its board has approved the spinoff of its domestic formulations business, including certain assets, into its wholly-owned subsidiary Sun Resins & Polymers Pvt Ltd with effect from 31 March 2012.

The Mumbai-based company said that the move is because of ''concern regarding certain assets of the domestic business.''

The domestic formulations business has been growing at 20 per cent annually since the last five years and contributes 43 per cent or Rs2,704 crore of its annual turnover.

Sun Pharma holds a 4.6-per cent market share in the Rs65,300-crore domestic pharma market. It is a leader in six specialities, and last year gained market share in psychiatry, neurology, cardiology, diabetology, ophthalmology and orthopedics.

The business has more than 500 brands and has partnership for selling diabetes drugs of MSD Pharmaceuticals, an affiliate of Merck & Co. Inc.

It introduced 37 new products into the market and 16 used a technology-based differentiation or were complex, while 15 were integrated to API.

The announcement surprised analysts as they believe such a move is linked to bringing in an overseas partner or a sell out in the future.

The management of Sun Pharma could also be looking at the long-term future of its domestic formulations business, where it is facing increased competition and government regulations are getting more stringent.