Sun Pharma has shuffled its top deck. The bet is on.

Starting this month, Kirti Ganorkar, who headed its India business, assumed the role of managing director while promoter and founder Dilip Shanghvi transitioned to the role of executive chairman.

Shanghvi’s son Aalok has been set on the leadership track, overseeing the pharma giant’s most important market. Richard Ascroft, ex-Takeda Pharmaceuticals executive appointed to run its North America business in June, reports to the junior Shanghvi, who is now chief operating officer.

Ascroft succeeded long-standing company executive Abhay Gandhi, who left the company in June. Sun Pharma also appointed Jayashree Satagopan as chief financial officer designate to succeed C.S. Muralidharan starting 1 July.

The drugmaker has previously brought in professional leadership from outside—it appointed ex-Teva Pharmaceuticals head Israel Makov as chairman in 2012—and shuffled senior management. In 2017, Abhay Gandhi, who then headed the India and subcontinent business, took over as North America chief executive from Kal Sundaram, who took on the role of CEO, India and emerging markets.

However, the current churn involves its globally critical functions, including the India business, the US, and its long-term speciality focus. This, industry experts say, makes it significant as a strategic long-term transition for the company.

“...it’s not unprecedented for Sun Pharma to have leadership change or bring outsiders in, but this scale and the coordination across functions suggest a more decisive phase of evolution," independent pharma analyst Salil Kallianpur told Mint.

Over the last few years, with generic price erosion and recent policy uncertainties in the US, the company has sharpened its focus on bolstering its global innovative drug pipeline. At the same time, it has indicated that the top-deck changes are part of a “structured and forward-looking succession planning process".

With succession transitions, timing is everything, said a pharma analyst at a brokerage. “Sun Pharma is in good shape right now, their business is strong and growth is coming…this is a good time for them to institute management changes or bring in strategic shifts," the analyst said, on condition of anonymity.

In the last five years, Sun Pharma’s market capitalization has more than doubled, from about ₹1.42 trillion at the end of calendar year 2020 to ₹3.97 trillion currently.

The firm has delivered a compound annual growth rate (CAGR) of 10% in sales between 2018-19 and 2024-25, HDFC Securities said in a July note, adding that it expected a similar CAGR for the next three years until 2027-28, with a steady Ebitda margin of 29%. Ebitda is short for earnings before interest, taxes, depreciation, and amortization.

In 2024-25, the drugmaker's total revenue from operations rose 8.4% to ₹52,578.4 crore, driven by domestic growth and its global speciality business. It expects its consolidated revenue to rise in mid-to-high single digits in 2025-26.

Sun Pharma did not respond to Mint’s queries.

Speciality focus

As US generics growth slows down, Sun Pharma has shifted its focus to its innovative drug pipeline.

Due to rising competition in some products and ongoing compliance issues at its manufacturing facilities, the company’s generic sales in the US have slowed, according to its 2024-25 annual report. US sales are largely driven by innovative products.

In 2024-25, US formulations sales reached $1,921 million, up 3.6% year-on-year. India formulations and global speciality sales recorded double-digit growth of 13.7% and 17.1% on-year, respectively. US sales accounted for 31% of the company’s total consolidated revenue.

In the June quarter, overall US sales were $473 million, up 1.4% on-year, primarily driven by innovative or speciality medicines such as Ilumya, Cequa, Winlevi, and Odomzo.

In July, it announced it had settled a patent row with American biopharmaceutical company Incyte Corp. over its hair-loss drug Leqselvi, paving the way for its launch in the US. Leqselvi is pegged to be an over $200 million product over 3-4 years from launch.

In March, it acquired US-based immunotherapy and targeted oncology company Checkpoint Therapeutics Inc. for $335 million. The drugmaker has received approval for Unloxcyt, which is used to treat skin cancer metastatic cutaneous squamous cell carcinoma (cSCC) or locally advanced cSCC, and is planning a launch in 2025-26.

“I think the team has been strengthened a lot, especially the top-level management in the last four to five years…they have invested a lot in talent in US speciality," said Vishal Manchanda, pharma analyst at financial advisory firm Systematix Group.

In his role as executive chairman, Shanghvi will be in charge of strengthening the speciality portfolio, the company had previously said.

Aalok, the company’s whole-time director and chief operating officer, will oversee the North American business, which is being run by a professional.

“The US leadership change is critical—that market is arguably the toughest globally for pharma (due to pricing, regulation). Getting someone with global pharma experience could help Sun Pharma compete better, protect margins, accelerate launches, etc.," said Kallianpur.

Ascroft, previously senior vice-president and business unit head of US plasma-derived therapies at Takeda Pharmaceuticals, is a seasoned biopharmaceutical executive.

“They are trying to make this company more professionally driven…although the promoter influence remains deep," said Manchanda.

A planned transition

Corporate successions can be tricky.

An ideal succession plan involves foresight and equal involvement of the erstwhile leadership and professionals as the next generation learns the ropes, said a senior executive at a management consultancy, on condition of anonymity.

The company is attempting to balance pushing ahead with its global ambitions while grooming the next generation to take over, the executive added.

This year, it elevated Shanghvi's daughter Vidhi to whole-time director and appointed Aalok as chief operating officer.

Aalok was brought into the company fold in 2006 and has handled various roles in marketing, research and development, project management, purchasing, and communications.

Over the past two decades, he has headed Sun Pharma’s business in Bangladesh and emerging markets, spanning 80 countries, and later took charge of its global generic research and development, global generic business development, and API (active pharmaceutical ingredients) functions.

Vidhi started out as brand manager within the India business in 2012, and took over as business head of its consumer healthcare business in 2015, following its merger with Ranbaxy Laboratories Ltd.

“As they [next generation of promoter family] gain more exposure about the business, they will probably wear a more senior hat," said Manchanda.

Bringing in Ganorkar, who has been with the firm for three decades, starting out as Shanghvi’s executive assistant in 1996, at the helm is also significant, said experts.

“It’s a move to preserve institutional memory and culture (values, decision norms, etc.), while allowing newer leadership to take over operational responsibilities," said Kallianpur.