Sun Pharma weighs $10B bid for US-based women's health firm
What's the story
India's leading pharmaceutical company, Sun Pharmaceutical Industries Ltd, is considering a major acquisition, according to The Economic Times. The company is looking to buy US-based Organon, a specialist in women's health with an expanding footprint in the biosimilars space. The deal, which could be worth around $10 billion including debt, would be the biggest cross-border acquisition in the Indian pharma industry and significantly boost Sun Pharma's presence in the US market.
Strategic move
Acquisition would be transformative for Sun Pharma
A successful acquisition of Organon would be a major strategic move for Sun Pharma. The company's advisors, including a European bank, are working on a financial package to present to Organon's board. This comes after Organon was spun out by MSD (Merck Sharp & Dohme) in 2021 with $9.5 billion debt and has since made several acquisitions, including Roivant's immuno-dermatology subsidiary Dermavant for $1.2 billion in September 2024.
Corporate turmoil
Organon faces challenges amid leadership changes
Organon has been facing challenges, including a 20.9% stock plunge on October 27 due to sales malpractice allegations. The company's CEO Kevin Ali resigned soon after, and Joseph Morrissey was appointed as interim CEO while they searched for a permanent replacement. Despite these issues, Organon's stock surged by 28.1% over the past month amid hopes of successful sale talks.
Financial health
Sun Pharma's financial performance and market cap
Sun Pharma, which has a market cap of $45 billion, reported an FY25 revenue of ₹52,041 crore and an EBITDA of ₹15,300 crore ($1.82 billion). The company's innovative products portfolio in the US grew to $1.21 billion in FY25, driven by its flagship plaque psoriasis brand Ilumya. Despite being engaged with Organon since it intensified its divestment program last year, talks had stalled due to high valuations but have resumed amid falling share prices.
Market impact
Potential acquisition could reshape US market
The global biosimilar market is dominated by eight companies, including Switzerland's Sandoz and US firms Pfizer, Biogen, Amgen. Samsung Bioepis, Organon's biosimilars manufacturing partner, was rumored to be a bidder late last year but later denied such plans. The potential acquisition of Organon by Sun Pharma could greatly reshape the competitive landscape in this lucrative sector.