Sun Pharma shares were trading over 2% higher on Tuesday after the drugmaker in an exchange release announced that it had signed an agreement with GlaxoSmithKline (GSK) to purchase its Opiates business in Australia.
GSK’s opiates business, including related manufacturing sites in Latrobe (Tasmania) and Port Fairy (Victoria) and its portfolio of opiates products along with inventory, will be transferred to a subsidiary of Sun Pharma. The financial details have not yet been disclosed.
Iftach Seri, Executive Vice President of API business at Sun Pharma, said, “The global opiates market holds good potential and the addition of GSK’s Opiates business will strengthen our positioning further. The acquisition is a part of our strategy towards building our portfolio of opiates and accessing strong capabilities in this segment.”
“It is difficult to quantify the possible impact of the deal as the financial details have not been disclosed,” said an analyst with a leading domestic brokerage. “However, Sun Pharma shares are trading higher, because the company has a track-record of making money out of all its acquisitions,” he added.
The product portfolio consists of poppy-derived opiate raw materials that are primarily used in the manufacture of analgesics for the treatment of moderate to severe pain.
“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,” said Steve Morris, general manager, GSK Opiates, in a statement.
In YTD, Sun Pharma has gained 14.5% as against 7.4% gain posted by the BSE benchmark Sensex during the same period. The sectoral index BSE Healthcare has gained 11.9% during the same period.