Sun gets direct line to poppy production with buyout of GSK opiates biz

A Tasmanian poppy field--Courtesy of Periptus, Creative Commons (CC-BY SA 3.0)

Sun Pharmaceutical Industries has picked up two manufacturing sites with its buyout of GlaxoSmithKline's opiates business in Australia, but it has gotten a lot more than that. It now becomes one of three companies globally with a "farm-to-market" opiate business, giving it direct access to poppy crops in Tasmania, where most of the raw materials for opiates are produced.

Sun said this week it had completed its deal for the GSK ($GSK) operations, getting manufacturing plants in Port Fairy and Latrobe, Australia. Terms of the acquisition, announced in March, were not offered up by either company. "The successful completion of this acquisition enables us to leverage our unique position in the global opiates business by capitalizing our global footprint and global ranking in the specialty generics market," Anil Kumar Jain, CEO of Sun's API operation, said in a statement.

GSK supplied about a quarter of the world's medicinal opiate needs from poppies grown by farmers in Tasmania, but instead of being on the buying end, Sun is now a seller and has its own direct source of raw materials for its expanded portfolio of pain drugs. In addition to Sun, Johnson & Johnson's ($JNJ) unit Tasmanian Alkaloids and privately held TPI Enterprises control production in Tasmania.

Tasmania produces about 85% of the global supply of thebaine, the opium poppy extract used to make Oxycontin and other similar drugs. It produces the entire world supply of oripavine, used to make treatments for heroin overdoses, and 25% of the world supply of morphine and codeine, which continue to be used widely outside of the U.S.

Because so much of the production of these ingredients is dependent on harvests in one small geographic area, GSK and J&J had been working to convince the Tasmanian government to legalize genetic engineering of poppies and to move some production from Tasmania to Australia.

- here's the Sun release

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