March 12, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Indian drugmaker Sun Pharmaceutical Industries’ acquisition of Ranbaxy Laboratories has seen a game of musical chairs in its C-level suite, with many of top executives from pharma taking over the top spots at Ranbaxy, as an exodus of its own top ranks continues.
Sun Pharma founder and Managing Director Dilip Shanghvi announced the changes in a memo sent to Sun Pharma employees this week, saying, “The leadership team members will report to me. This leadership structure is effective from Day 1 of merger.”
Ranbaxy‘s Chief Executive Officer and Managing Director Arun Sawhney will stay with the merged company. “An appropriate role is currently being evaluated for Arun,” a Sun Pharma spokesperson told the times of India.
Sun Pharma’s North American chief Kal Sundaram will now head the merged entity’s U.S. and Canadian markets, while Michael Perfetto, chief commercial officer of Sun’s Generic and Over the Counter unit will now captain the same section in the combined firm. Abhay Gandhi, Sun Pharma chief executive in India, will lead the Indian subcontinent, while Aalok Shanghvi, son of Dilip Shanghvi and vice-president of Sun Pharma, will lead the emerging markets business.
The deal provides for a year’s ‘cooling period’ during which the pay of Ranbaxy employees cannot be lowered, it was reported in October.
Sun Pharma bought the unit from Daiichi Sankyo, Inc. for $4 billion in 2014. Under the terms of the agreement, Ranbaxy is rumored to have budgeted around Rs 65 crore (or $640 million) for retention bonuses for 70-75 executives.
Sun executives declined to corroborate the pay scale report at time.
“It is not possible for us to comment on specifics of the agreement or any steps that Ranbaxy may have taken towards employee retention. These are questions that should be posed to them,” the company told the paper.
Struggling Indian drugmaker Sun Pharmaceuticals got some get news Tuesday, when the company said it will buy GlaxoSmithKline ‘s Australian opiates business for an undisclosed amount, giving it a shot at the $69.63 million the unit brought in during 2013.
Australia’s poppy market is highly coveted by pharmaceutical companies, because its Tasmania region is the world’s largest legal supplier of pharmaceutical grade opiates for painkillers--and is controlled by only three companies, Glaxo, Johnson & Johnson and TPI Enterprises.
As such, Sun was eager to snap up the unit, which currently employs 185, with 155 in the state of Victoria state and 30 in Tasmania.
“The acquisition is a part of our strategy towards building our portfolio of opiates and accessing strong capabilities in this segment,” said Iftach Seri, executive vice president of the active pharmaceuticals ingredients business at Sun Pharma.
For its part, Glaxo said it felt the deal made solid strategic sense, as it attempts to shift energy to other areas of its business and “focus on delivering its innovative product portfolio” in Australia.
“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,” Steve Morris, general manager of GSK Opiates, said in a statement.
Sun Pharma had a rough 2014, saying Nov. 16 that it is voluntarily recalling 68,194 bottles of a depression drug, sold as Venlafaxine Hydrochloride Extended-Release in the United States.
That news, and rumors that Merck & Co. had terminated a collaboration agreement with Sun Pharma, have pressured shares of the company ever since.
The information was obtained via the U.S. Food and Drug Administration (FDA)’s website, which said the regulator was recalling the drug for failing “dissolution specification”. The recall was originally initiated Sept. 26 but became broader this week as it became clear more product had been impacted.
The tablets are made by Sun Pharma Global Inc., a unit of the company. The 37.5 mg tablets in 30-count bottles and 90-count bottles were manufactured at Halol in Dubai. The Class II recall is defined by the FDA as “a situation in which use of or exposure to a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote”.
BioSpace Temperature Poll
Vertex Pharmaceuticals made news last week when it terminated leases on three properties in Cambridge, Mass, that freed up 313,000 square feet of space in the Genetown area. The company has spent a significant part of 2014 consolidating its operations on the South Boston waterfront, leasing 291,000 square feet of office space at West Kendall Street in Cambridge’s Kendall Square. So we wanted to ask the BioSpace community: Is Boston going to be getting more biotech leases anytime soon, or fewer tenants?
