The Vadodara based speciality drug manufacturer Sun Pharmaceutical Industries Ltd has decided to merge the pharmaceutical business of MJ Pharmaceuticals Ltd based at Halol near Vadodara, into itself.
Sun has not divulged the financial details of the deal.
A Sun Pharma company spokesperson said, "The decision has been taken to take over the remaining part of MJ Pharma and to transfer the ownership of plant and machinery to Sun Pharma. Since the year 2000, Sun Pharma owns 100 per cent stake in MJ Pharma's land and buildings. The latest move will enable the company to take control of MJ Pharma's manufacturing plant and machinery also."
Sun Pharma had made investments in MJ Pharma in 1996 to use the latter's formulations manufacturing facility, that is approved by several international regulatory bodies.
The Halol unit has approvals from MHRA, UK, US Food and Drugs Administration and the South African MCC. It was being used by Sun Pharma as a contract manufacturing site.
MJ Pharma produces sterile dry powder injections, small volume injections, tablets, capsules, liquids and ointments for Sun Pharma. Lines for soft gelatin caps and aerosols were added later.
The deal to acquire the manufacturing facility and machinery will ensure that Sun no longers exports pharmaceuticals manufactured at a contract manufacturing site, but at a site wholly owned by it.
The company official informed that MJ Pharma will now become part of Sun Pharma once the formalities will be completed.
"Looking at the approvals from overseas regulators that the Halol unit has, Sun Pharma will benefit from it largely especially in overseas business. The financial part of the deal will be known soon once the valuation of the assets at the unit will be completed," the company spokesperson added.
MJ Pharma has one of the best insulin manufacturing capacity in the country, company sources stated.
At present, M J Pharma produces insulin for Eli Lilly. A Sun Pharma official expressed inability to comment on the future of arrangement for insulin manufacturing between M J Pharma and Eli Lilly at the moment.
MJ Pharma, which was referred to the Board of Industrial and Financial Reconstruction, had reported sales of around Rs 40 crore (Rs 400 million) when Sun Pharma picked up a majority stake in the company. The company was promoted by one Jasubhai Mehta before it was declared sick.
Sun Pharma posted a total income of Rs 352.69 crore (Rs 3.53 billion) for the third quarter of the 2004-05 fiscal, 30.4 per cent higher than that of the corresponding period of the previous fiscal and sales for the quarter ended December 31, 2004 were pegged at Rs 292.58 crore (Rs 2.93 billion), 22.8 per cent higher than sales of Rs 238.27 crore (Rs 2.38 billion) for the corresponding period of the previous fiscal.
For the nine months ended December 31, 2004, the company posted a total income of Rs 989.65 crore (Rs 9.89 billion).
