Company sources said that Sun Pharma will initially target the British and German generic markets and will use the MJ Pharma site to service these markets. Though the MJ Pharma plant is ready in terms of documentation and infrastructure, revalidation of regulatory approvals and filings would begin only after the Detroit-based Caraco Pharma (acquired earlier by Sun Pharma) begins to receive its approvals, sources said.

Sun Pharma will leverage on its manufacturing and product development skills, while using the proposed partners market experience in that country. The MJ Pharma facility already has a UK Medicines Control Agency's (the British equivalent of the US FDA) approval for all its manufacturing lines, though this needs revalidation.

Agency reports say that MJ Pharma has sought to be declared a sick company. MJ Pharma, in which Sun along with group investment companies holds 52 per cent stake, has filed an application with the Board of Industrial and Financial Restructure (BIFR) to be declared a sick company which would be heard by the board next month, the reports said. It is, however, unclear whether this has already been factored into Sun Pharma's long-term growth strategy.

However, Sun Pharma is categoric that it intends to ensure that Caraco's operations are self sufficient before it commits any further funds into the European generic markets. Sun Pharma will also use Caraco's facility as a production base for other interesting markets where a US manufacturing site is better perceived. Caraco is expected to break-even next year.

Approximately nine abbreviated new drug applications (ANDAs) from Caraco are awaiting US FDA approval while an additional five to six products are awaiting filings.

ANDA filings are expensive propositions and consist of three major components - the cost of the biostudy, cost of filing and the cost of product development (comprising material and research and development costs). The cost of a biostudy can vary depending on the complexity of the product and range from $300,000 to $1.5 million per dosage strength and this needs to be repeated for each strength.