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As it announced the beginning of its integration with Ranbaxy, Dilip Shanghvi, Sun Pharmaceuticals’ managing director, spoke to Abhineet Kumar and Reghu Balakrishnan about challenges and strategy.
Excerpts:
Will value be created for Sun Pharmaceuticals from generics or the speciality business?
The focus for value creation will be on all business segments, including speciality, generics (branded, complex, pure) and active pharmaceutical ingredients.
Also the consumer health business that is coming with Ranbaxy has huge opportunity. This will play the role of the major growth engine.
We are also expecting synergy benefits of about $250 million in the next three years through our value creation initiatives.
What are your competitors’ strengths you would like to have?
Every company has its own strengths. Some are good in products and some are good at meeting regulatory requirements. As we grow we would like to build all these strengths. It is not that we are targeting any one company and we would like to emulate them.
What are the challenges after the merger with Ranbaxy?
Our focus remains on remediation at units that are in deviation from good manufacturing practices. We are aiming to achieve compliance in manufacturing in line with regulators’ expectations.
Our effort will be to bring back Ranbaxy products that are not in the market in the US. We are committed to regaining confidence of the US Food and Drug Administration.
We are not sure when these issues can be sorted out. We are not considering any job cuts after the deal closes.
How will you integrate Ranbaxy’s team?
We will have to develop trust and win our new colleagues. We have started working towards this and I am confident we will be able to achieve it. Our chairman, Israel Makov, will help in this complex Ranbaxy deal as he did with Teva.
What are your plans for expansion in the US and entry into other markets like Japan?
We have received approvals for 437 abbreviated new drug applications and we have 149 more awaiting approval from the FDA.
So our product pipeline is robust. Besides, consumer healthcare is also an important space for us to grow in the US. We keep exploring new markets like Japan for expansion. However, no acquisition has been planned for this market yet.
What will be the research and development expenditure of the combined entity now?
We have investments worth $250 million in R&D. We will increase R&D spending to $300 million in 2015, which will be 6-7 per cent of the combined revenue.
Ranbaxy's R&D productivity has come down, earlier they used to file 25-30 filings with the FDA.
