Sun Pharma says talk of $10bn Organon bid is 'speculative'

Sun Pharma has downplayed a rumour that it is in talks to acquire women's health specialist Organon, after a report suggested a $10 billion offer was being discussed.

In a statement to the stock exchange in India, the Mumbai-headquartered group said that an article that appeared in The Economic Times today is "speculative in nature and there is no material event or information that requires disclosure."

It added: "We adhere to the highest standards of governance and disclosures and will keep the stock exchanges informed of any material events."

The report – which cited people familiar with the development – suggested Sun Pharma wants to acquire Organon to boost its presence in the US market and tap into its position in biosimilar medicines. Later, the newspaper put out another article acknowledging the pharma group's statement on the rumour.

Buying Organon for $10 billion would be the largest acquisition made by Sun Pharma since it took control of fellow Indian drugmaker Ranbaxy in a $4 billion transaction that was completed in 2015 and made it India's largest specialty generic pharma group.

The company has a history of accelerating growth with M&A deals, having earlier bought generic drugmakers Caraco Pharma of the US and Taro Pharma of Israel to expand its international stature. Latterly, it has started to look at extending its capabilities in specific therapeutic categories, and last year, for example, snapped up cancer specialist Checkpoint Therapeutics for around $355 million.

An Organon deal would fit into the latter mould, with its strong focus on women's health areas, including contraception, fertility, and hormonal therapies. It also has a growing biosimilar portfolio that now features several products and was expanded last November with the FDA approval of Henlius-partnered breast cancer therapy Poherdy (pertuzumab) – the first biosimilar of Roche's big-selling Perjeta brand.

Organon was spun out of MSD/Merck & Co in 2021 and is currently predicting 2025 sales of up to $6.25 billion, which would be a small decline on the prior year. It has also dipped its toe into M&A recently with a $1.2 billion takeover of dermatology specialist Dermavant in 2024.

The company has experienced some disruption of late, after former chief executive Kevin Ali stepped down last October after an investigation into 'improper' business dealings with wholesalers. He has been replaced on an interim basis by Joseph Morrissey while the search for a new permanent CEO is carried out.