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Merck close to strategic deal with Sun Pharma

Merck close to strategic deal with Sun Pharma
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First Published: Mon, Apr 11 2011. 01 24 AM IST
Updated: Mon, Apr 11 2011. 10 48 AM IST
Mumbai: Drug multinational Merck and Co. Inc. is close to signing a strategic marketing partnership with Sun Pharmaceutical Industries Ltd in the domestic market worth Rs 60,000 crore, said two people aware of the development.
MSD Pharmaceuticals Pvt. Ltd, the local arm of the world’s second largest drug maker, would look at the strong marketing network that Sun, India’s most valued pharma firm, has established in the country.
The partnership is likely through a marketing joint venture or a co-marketing arrangement, the two people said, requesting anonymity.
“It could be also a therapy area or a product-specific deal initially, and may later expand the scope,” said one of them.
“The companies may jointly make a formal announcement on Monday,” said an executive in one of the companies, refusing to elaborate.
Spokespersons for MSD and Sun declined to comment.
The company executive spoke on condition that neither he nor his company be named.
“Sun Pharma may also look at licensing one or two new drugs from MSD to add to its specialty portfolio under the deal,” said the second person with direct knowledge of the matter.
If the companies announce a partnership, it will be the second such large sales and marketing partnership between a multinational and local drug maker in 2011.
German drug firm Bayer AG in January announced a marketing joint venture with Ahmedabad-based Cadila Healthcare Ltd, also known as Zydus Cadila, to jointly sell medicines from the portfolio of both the companies. Following this, Bayer had transferred all its existing domestic formulation business to the new joint venture.
Foreign drug makers, attracted to the fast growing emerging markets such as India after growth in the established markets have started contracting, have started acquisitions or strategic business tie-ups with large local firms to grab market share.
“Collaborating with big local companies is going to be (a) big trend among foreign companies, who do not believe in a big-ticket acquisition in the local market for further growth,” said Sujay Shetty, head, pharma and life sciences, at PriceWaterhouseCoopers India.
Sun, which has 4,000 people in the field and a large specialty doctor network, is ranked top in the therapy segments of psychiatry, gynaecology, neurology, cardiology and ophthalmology in India.
“Sun Pharma is a very strong candidate to be picked up by any multinational drug maker for a business partnership in the local market, which is going to be strong trend now in India,” said Muralidharan Nair, leader, pharma and health sciences, at consultant Ernst and Young India.
MSD has a broad portfolio of medicines in therapies such as cardiovascular diseases, diabetes, obesity, bone and respiratory afflictions, immunology, dermatology, infectious diseases, oncology, neurosciences, ophthalmology and child and women’s health.
MSD managing director K.G. Ananthakrishnan had in a March interview said his company was exploring sales and marketing alliances and partnerships with big local firms to expand market reach. He also said MSD would prefer organic growth in India, using the product portfolio of the global parent to an acquisition route.
MSD already has some 13 manufacturing partnerships in the country. “This number will keep increasing as we bring more and more products to this market,” Ananthakrishnan had said.
It has also tied up with Piramal Life Sciences Ltd and Orchid Chemicals and Pharmaceuticals Ltd for research projects.
ch.unni@livemint.com
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First Published: Mon, Apr 11 2011. 01 24 AM IST