New Delhi: Drug major Sun Pharma is now a step closer to becoming the world's fifth-largest generic drug company, as the US Federal Trade Commission (USFTC) has given a conditional nod for the proposed $4-billion merger with Ranbaxy. Earlier, the Competition Commission of India (CCI) had granted a conditional approval to the merger in December 2014. Now, just a key nod from the High Court of Punjab and Haryana is awaited on the Sun-Ranbaxy merger. The matter is expected to come up in the court on February 2.
The US FTC has asked Sun Pharma to divest its interest in a generic anti-bacterial medicine (Minocycline tablets) to Torrent Pharma of Gujarat. The deal size could not be confirmed.
Sources close to the development have pointed out that Torrent Pharma is also in the fray to buy the Indian assets of Sun and Ranbaxy, which the CCI had asked the latter to divest in order to get approval for the proposed merger in India.
“We are unable to disclose details at this point in time,” an official spokesperson of Sun Pharma said in an emailed reply. A query sent to Torrent Pharma remained unanswered.
Ranbaxy is currently one of the three suppliers of the product, while Sun is one of only a limited number of firms likely to sell generic Minocycline tablets in the United States in the near future. “Sun is one of a limited number of firms that has Minocycline tablets in development and an ANDA under review by the US Food and Drug Administration (FDA). Therefore, the acquisition would likely increase concentration in the relevant markets substantially by reducing the number of future suppliers of Minocycline tablets,” the FTC has said in its order.
According to the order by the FTC, Sun and Ranbaxy must sell Ranbaxy's generic Minocycline capsule assets to Torrent to enable Torrent to achieve regulatory approval for a change in ingredient suppliers for its Minocycline tablets as quickly as Ranbaxy would have been able to do in the absence of the deal.
Ahmedabad-based Torrent Pharma, which is buying Ranbaxy's generic Minocycline tablet and capsule assets, feels that its growth momentum in the US would be led by new generic launches in the country in the coming months.
