Its advancing step by step for Sun Pharma. In compliance with the merger agreement signed with Taro Pharma, Sun has commenced its tender offer for the controlling shares in Taro. Here is the news release.

It’s almost impossible that Taro promoters/controlling shareholders will subscribe to the offer and its known that Sun’s current move is to fortify itself with all the legal armoury to take on Taro for a protracted legal battle.

In dealing with the present crisis of Taro, Sun Pharma’s Dilip Shanghvi may not help but remember what happened five years ago in 2003. Like Taro, Shanghvi had plans to acquire a majority stake in the loss-making US company Caraco at the back of a sustained turaround strategy. 

But he had similar adversities at Caraco where a few directors in the independent committee expressed dissatisfaction over Sun’s contract of product-for-share approach.  However, what lies behind the soft-spoken Shanghvi, is a shrewd and meticulous mind that could see future hiccups before others could even think about it.

Sun had agreed to buy a 36.5 % stake in loss-making Caraco a decade ago for $7.5 million. Dilip Shanghvi had sensed an opportunity in picking up the loss-making enterprise, tie up its back-end with Sun’s cost-effecient manufacturing units in India and then pump the products into US through Caraco, thereby ringing in profit or decent margins over the next three to four years.  

The plan worked and Caraco showed a well-crafted turnaround. Shanghvi hiked his stake upto 49%. But then the problem struck. Exactly on the lines of Taro, Caraco’s shares moved fast, much to the irritation of the Caraco directors who wanted to get a better price over the predetermined compensation agreed by Shanghvi.  

Dilip Shanghvi made many rounds to the Detroit based company and quelled the hostility. He agreed for a better price but managed to increase stake to an overwhelming 65% in Caraco. Like many of the crises, Shanghvi handled Caraco’s dissenting directors and is now making the most of Caraco’s solid pipeline of products.

Shanghvi’s  fight seems to be tougher with Taro but the way Sun has dealt with the situation so far, it appears that the company has enough reasons to emerge a winner yet again. Dr Barrie Levitt will have to do his best not to lose control over Taro.  

Its been a struggle for the Indian biotechnology industry for many years now. They are questioned on their product quality by atleast four authorities starting from the health ministry to the environment ministry.

But there is some hope that could end their plight. As P T Jyothi Datta of Hindu Business Line reports, one apex authority called the National Biotechnology Regulatory Authority, could be the single stop window for clearance of future recombinant and gene therapy products.

That may not essentially include products like insulin or hepatitis B products whose active ingredients are derived from GMOs but may not be living GMOs themselves. Here is an interesting report.

The sparring over Taro’s control between Dilip Shanghvi and Dr Barrie Levitt is reaching a decisive phase. After exchange of hard-hitting letters like this one , Sun has finally taken the utlimate call to wrest control of the Israeli drug firm. 

It has decided to make the tender offer for Taro shares that may take its stake from the current 35 or 36 % to 48 % and may then translate into controlling rights upto 65%.

Whats more Sun has taken Taro and the Levitt family to New York Supreme Court in complying with the rules that were applied when signing the merger agreement between the two companies on May 18, 2007. The ball is now in Dr Levitt’s court and its going to get tougher from here on.

Check out this latest Press Release from Sun Pharma.  While a lot of action will happen between the two warring promoters, read this Merger Agreement between the two companies. Its 129 pages !

In late 18th century, a famous physician by the name Karuna Shankar Bhatt from Jamnagar was nicknamed “Zandu” Bhatt for his long and wavy hair. In Gujarati, I am told, Zandu is loosely referred to a wavy flag.

Karuna Shankar Bhatt had an ability to find ayurvedic cures of all kinds and soon found popularity ranging from the royal families to the masses. His family name “Bhatt” got converted into ”Vaidya” the sanskrit parlance for a physician, quite naturally.

Vaidya wanted to branch out into a larger business and sought the help of the Parikhs - a business community - to steer the ayurvedic drugs business professionally. Thats when the two families decided to make Bombay their new home and listed their ayurvedic enterprise Zandu way back in 1919.

As Vaidyas - the Zandu originators - have now sold their stake to Emami, the Parikhs are faced with their biggest challenge to control Zandu. Its an imperative for the Parikhs now to save their pride and the future as Vaidyas had been the silent partners in the company for many decades. Read more about Zandu’s origins here drawn from the Zandu website.