Sun Pharma hits fresh 52-week high, gains over 8% intraday on plans to buy GSK unit

NEW DELHI: Sun Pharmaceuticals surged over 8 per cent in intraday trade to hit its 52-week high of Rs 1,006 after the drug maker said it would acquire the opiates business of British drug maker GlaxoSmithKline (GSK) in Australia, in a bid to capture areas with limited competition.

The acquisition will give Sun Pharmaceuticals product portfolio consisting of poppy-derived opiate raw material — mainly used to make painkillers — and access to GSK’s manufacturing sites in Tasmania and Victoria.

Sarabjit Kour Nangra of Angel Broking in a note said, "The global Opiates market holds good potential and the addition of GSK’s Opiates business will strengthen Sun Pharmaceutical's positioning further."

"The transaction closure is subject to customary closing conditions and requisite regulatory and other approvals, and is expected to close by August 2015. Thus, the acquisition will fully reflect in FY2017. We remain neutral on the stock,” she added.

Tasmania is the largest producer of opium alkaloids for the global pharma market.

"The acquisition is in line with Sun Pharma’s focus on controlled substances as a key growth therapy segment," Hitesh Mahida of Antique Stock Broking Ltd said in a research note.