While Sun Pharmaceuticals continues to struggle with its U.S. sales, emerging markets have provided an area of growth for the Indian generics maker. Sun is taking steps to boost those returns by increasing its stake in Malaysia, where it has tablet-making facilities.
In a public filing today, the drugmaker said it had invested about $4.5 million to increase its stake in Ranbaxy Malaysia to 85.9% from 79.55%, Indian Info Line reports. It is Sun's second boost in the venture in three months. In October, Sun raised its ownership by 8.3%.
Ranbaxy had been producing generic meds in Malaysia for years when Sun bought the competitor in 2014 for $4 billion, pledging to fix the manufacturing problems at Indian plants that plagued what once was India’s largest drugmaker. The year before the buyout, Ranbaxy announced it would spend $35 million to build a second manufacturing facility in Malaysia.
Sun reported that the Malaysia operation has seen revenues growth of 27.5% in the last three years to nearly $24 million. While the numbers are small, it is at least growth. Emerging markets has been a bright spot for Sun, which has struggled in the U.S. as manufacturing problems at both Ranbaxy and Sun legacy plants, along with an intensely competitive generics market, have been a drag on revenues. U.S. sales in its second quarter were down 44% to $309 million from the same quarter the previous year. Emerging market sales that quarter were up 16% to $196 million, while rest of world sales were up 40% to $111 million.
While some western drugmakers are selling in Malaysia, it has been generally Indian drugmakers who have been willing to manufacture locally in the politically volatile country. Among those is Biocon, which had expected to complete by year-end a $250 million plant that will produce insulin for Malaysia and for export.