Sun Pharma and Merck set up JV

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oi-Shoaib MD

By Shoaib Md

Published: Tuesday, April 12, 2011, 13:21 [IST]

Mumbai, Apr12: India's Sun Pharmaceutical Industries has formed a joint venture (JV) with Merck the US based drug manufacturer. The JV aims to bring innovative formulations to emerging markets, including India.

During the announcement, the company did not give details on the financial aspects of this partnership. This is the second large-scale sales and marketing tie up in 2011.

In January of 2011, Cadila Healthcare from India had announced its sales and marketing tie-up with Bayer AG, German drug-maker.

The JV will target emerging economies covering Asia Pacific, Latin America, Eastern Europe, the Middle East and Africa.

In the announcement the idea of utilising each company's strength was clearly expressed. Innovation in product development will be carried out by Sun Pharma Advanced Research Company (SPARC), a public-listed Sun group company with focus on research and development (R&D). Meanwhile Sun Pharmaceutical's will skills in product development and its network of manufacturing facilities. Merck will participate with its expertise in regulatory competence and market presence.

This joint venture will not affect the current business of the companies.

Dilip Shanghvi, chairman and managing director of Sun Pharma, "The venture will build on intellectual property created by Sun and SPARC. It will help create a new business opportunity for both Merck and Sun, while retaining existing products and partnerships."

Adam Schechter, Merck's president of global human health, said "Innovations come not just in the form of products but also as partnerships, processes and new collaborations."

The two parters, Sun Pharma and Merck, have an equal say in the JV. It was also stated that the collaboration between Merck and Sun Pharma will be managed and led by a joint board consisting of members of senior management from both companies.

“The JV board, which will have equal representation from both partners, will decide which products to work upon and develop. The focus would be on new combinations," Shanghvi said.

Merck is known as MSD outside the US and Canada. The company operates in 140 countries in prescription medicines, vaccines and biological therapies. Whereas, Sun Pharma manufactures and markets a large number of pharmaceutical formulations as branded generics in India, the US and several other markets.

Industry experts expect Merck to benefit through this JV as it will have expand its presence in emerging markets, including India, where it is looking to crash into the top-five league in the next few years. Sun Pharma's gain would be by leverage Merck"s global footprint and clinical expertise in manufacturing products and reaching out across move geographies than it could think of doing on its own.

With 19% of Merck"s sales revenue comes from emerging markets; analysts have said in the recent past that it makes investment sense for the firm to expand its sales and manufacturing reach in those markets. With US and Europe markets maturing, emerging markets offer hope for maintaining growth momentum.

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