Sun Pharma reaches deal to buy out Taro in $347m deal

India’s Sun Pharma has signed an agreement to take full control of Israeli generic drugmaker Taro Pharmaceutical Industries, taking it into private hands.

New York Stock Exchange (NYSE)-listed Taro said, in an SEC filing, that Sun Pharma – which already has a stake of around 78.5% in the company – has agreed to a price of $43 per share for the outstanding shares, worth around $347 million.

The merger is currently expected to close in the first half of 2024, subject to various closing conditions, including a shareholder vote and financial regulator approvals.

The offer is a 48% premium on Taro’s price of just under $29 when Sun Pharma first signalled its interest in taking full control of the company on 25th May last year. At the moment, Taro’s NYSE shares are trading at $41.28.

Taro sells off-patent prescription and over-the-counter pharmaceuticals, as well as active pharmaceutical ingredients (APIs) and some proprietary products, with annual sales of approximately $600 million a year. It has developed a presence in the dermatology sector, with an extensive range of topical products. For comparison, Sun Pharma’s annual sales were around 445 billion rupees ($5.3 billion) in its last fiscal year.

“Over the years, with Sun Pharma’s strategic interventions, Taro has remained a key player in the generic dermatology market in a challenging environment,” said Dilip Shanghvi, the Indian drugmaker’s managing director.

“Post completion of the merger, the combined entity will firmly move forwards, leveraging its global strengths and capabilities to better serve the needs of patients and healthcare professionals,” he added.

Meanwhile, Taro's chief executive, Uday Baldota, said that the company is “committed to delivering high-quality products to [its] patients and customers around the world,” adding that the Sun Pharma merger will “further enable [Taro] to compete effectively in [its] products and markets.”

The Taro takeover announcement comes shortly after Sun Pharma licensed non-exclusive marketing and distribution rights for Bayer’s chronic kidney disease (CKD) therapy finerenone in India, which will be sold as Lyvelsa alongside Bayer’s own brand Kerendia, which launched in 2022.

Last October, Sun Pharma also signed a similar agreement for non-exclusive Indian rights to Zydus Lifesciences’ HIF-PHI inhibitor desidustat – another CKD drug that it will market as Rytstat, alongside the Zydus Oxemia brand – and also licensed Pharmazz’ stroke drug Tyvalzi (sovateltide) for the Indian market.