Sun Pharma to buy Glaxo's Australian opiates business

India's Sun Pharmaceutical Industries has entered into an agreement to buy multinational drug maker GlaxoSmithKline's opiates business in Australia, the company said, without disclosing financial details.

GSK's product portfolio being bought by Sun consists of poppy-derived opiate raw materials that are primarily used in the manufacture of analgesics for the treatment of moderate to severe pain. The company expects the transaction to close by August 2015, pending regulatory approvals.

Included in the business are manufacturing sites in Latrobe (Tasmania) and Port Fairy (Victoria) and its portfolio of opiates products along with inventory, will transfer to a subsidiary of Sun Pharma, a note from Sun Pharma said.

All employees from both sites will also be offered employment by Sun with the opiates business, it added.

The development comes even as Sun wraps up the last leg of its $ 4-billion proposal to buy troubled drugmaker Ranbaxy in India. Last month had seen Sun's promoter family invest Rs1,800 crore in Suzlon Energy (See: Suzlon Energy confirms 23% stake sale to Sun's Shanghvi).

But Dilip Shanghvi, Sun's managing director, later told analysts that he would remain focussed on the pharmaceutical business.

The transaction helps GSK simplify its operations in Australia by allowing it to focus on delivering its innovative product portfolio that will be central to the company's growth strategy in this country, the note said.

Globally, GSK had entered into a differently structured mega deal last year with Novartis and Eli Lilly, allowing the companies to focus on their strengths and exit non-core areas.

Steve Morris, general manager, GSK Opiates said in a statement, ''The Opiates business has been an important part of our Australian business for many years, but as our portfolio transitions, we believe now is the right time to hand this business over to someone else.''

Iftach Seri, executive vice president of the API business at Sun Pharma said, ''The global opiates market holds good potential and the addition of GSK's opiates business will strengthen our positioning further. The acquisition is a part of our strategy towards building our portfolio of opiates and accessing strong capabilities in this segment.''

Glaxo Australia pioneered the Tasmanian Poppy industry in the early 1960s. Founded to providing a reliable and secure source of opiate alkaloids, of which GlaxoSmithKline has grown to become one of the world's major suppliers.