5. Sun Pharmaceutical

2014 Generics Sales: $4.5 billion
Worldwide Market Share: 6%

Sun Pharmaceutical Industries' 68% growth in generic drug revenue represented its $4 billion buyout of compatriot Ranbaxy Laboratories this year, just days before closing out its fiscal year. The move added nearly $2 billion to its revenues and cemented its position as the fifth largest generics drugmaker worldwide and the number one generics supplier to the U.S. market.

Dilip Shanghvi, who started India's Sun in 1982 with an investment of a couple of hundred dollars, pieced the company together with more than a dozen deals in the past 15 years or so. In the U.S. it owns Caraco Pharmaceutical Laboratories and with its Ranbaxy buy, it got Ohm Laboratories and its plant in New Jersey. It also controls Israel-based dermatology specialist Taro Pharmaceuticals.

Several years ago, Shanghvi set his sights on getting a bigger piece of the U.S. market, and many observers thought that meant buying another U.S. company. Instead in 2014 he struck a deal for Ranbaxy Laboratories, whose years of FDA regulatory entanglements had led the agency to ban four of its plants, the primary reason controlling shareholder Daiichi Sankyo was anxious to unload the business. With the all-stock deal, Shanghvi got a much bigger slice of the American pharma pie at a very cheap price.

The company now has 1,800 scientists among its 30,000 employees and will focus on expanding its specialty pharma business and making complex generics. The company said it intends to pick up the pace in R&D with the potential to devote $500 million a year to it.

In the U.S., where sales of about $2.3 billion will account for half of the merged company's revenues, it will focus on dermatology, oncology, controlled substances and ophthalmology. It claims to be the leading supplier of generic dermatology products in the U.S. and counts itself third in branded products in that category. It has 450 approved products in the market and 149 applications for generic drugs awaiting approval.

With Ranbaxy, it also got a company that has had a strong track record in securing first-to-file exclusives on generics of a number of blockbusters, like Pfizer's ($PFE) Lipitor and Novartis' ($NVS) heart drug Diovan. But the FDA's concerns over Ranbaxy's manufacturing and testing standards delayed its launch of Diovan, depriving consumers of the benefits of the cheaper drug for nearly two years. That led the FDA to yank Ranbaxy's approvals for two more such drugs last year, AstraZeneca's ($AZN) heartburn med Nexium and Roche's ($RHHBY) antiviral Valcyte, and give them to competitors.

In fact, for Sun to realize its full potential as a much bigger company, Shanghvi has acknowledged it needs to expeditiously resolve Ranbaxy's regulatory problems, something he has pledged to do. In the meantime, the costs of merging and getting Ranbaxy back in shape taking a toll on Sun's earnings. In particularly in the U.S., where they were off by 28% in its last quarter.

India remains its second largest market, making up a quarter of its sales, while emerging markets account for roughly 15% and Western Europe and other markets 8%. While generics remain its bread and butter for now, like some other Indian generics makers, it is working to build a presence in higher margin branded and specialty drugs. Toward that end, last year it in-licensed a monoclonal antibody undergoing Phase III trials targeting IL-23 for treating chronic plaque psoriasis from Merck & Co. ($MRK). -- Eric Palmer (email | Twitter)

For more:
Sun sales, earnings pummeled by plant problems, integration costs
More cuts as Sun Pharma pulls Ranbaxy into the fold
Sun doubles in size as it completes Ranbaxy buyout
Court shoots down Ranbaxy's bid to block rival Nexium and Valcyte generics
Daiichi Sankyo sells off Ranbaxy's problems to Sun Pharma
Ranbaxy manufacturing drama continues with FDA action on API plant

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5. Sun Pharmaceutical