The Covid-19 pandemic has made drugmakers of different hues jump into action. Some got into vaccine manufacturing deals, others tried their hand at repurposing drugs, and a few have collaborated to bring antiviral drugs such as Remdesivir to the market. Most have hogged the limelight, with a few making money as well.
Amidst this buzz, India’s largest drugmaker, Sun Pharma, has chosen to be relatively quiet.
Analysts and experts tracking the company told Moneycontrol that Sun Pharma has been measured in its Covid-19 response compared to some of its smaller rivals, who are willing to bet a little more on Covid-19 interventions.
While its performance is modest compared to its rivals, to be sure, barring Remdesivir, Sun Pharma sells most of the drugs used for Covid-19 treatment, including hydroxychloroquine, azithromycin, doxycycline, ivermectin, methylprednisolone and vitamins, among others. But these drugs were nothing new, and have been part of Sun Pharma's portfolio for years.
The company launched one of the most affordable versions of antiviral drug Favipiravir, at Rs 35 per tablet, under the brand name FluGuard.
Sun Pharma is also testing two drugs on humans as potential treatment options for Covid-19. One is a plant-derived drug called AQCH, where it partnered with ICGEB, Italy. The drug, originally meant to treat Dengue, is being repurposed for Covid-19 given its antiviral properties. The company received permission from the Drug Controller General of India (DCGI) in April to conduct clinical trials on 210 patients. The results of the clinical trial are expected this month.
The second drug that is being tested is Nafamostat mesylate, which is used to treat acute pancreatitis. The drug is now being tested on patients to see whether it can effectively block the entry of the new coronavirus. The trial is underway.
Follow Moneycontrol's COVID-19 Vaccine Tracker here.
A Sun Pharma spokesperson refuted criticism that the company hasn’t done enough to tackle Covid-19.
He said that while Sun Pharma prefers to be low-profile, it has been quick to respond to the pandemic both by contributing generously and also by ensuring that the drugs used in Covid-19 are available to patients.
Sun Pharma’s Covid-19 efforts, however, have been overshadowed by its rivals. The company doesn’t figure in the list of companies that got licences from US drugmaker Gilead to manufacture and distribute the widely prescribed antiviral drug Remdesivir. Cipla and Hetero took the lead here.
Sun Pharma does manufacture Favipiravir, the other antiviral prescribed for mild Covid, but it competes with 20 other drugmakers. Glenmark has stolen the thunder here. Among Covid-19 vaccines too, Dr Reddy’s, which has hardly any experience in vaccines, has jumped to conduct clinical trials and distribute Russia's Sputnik vaccine. Even Aurobindo Pharma has launched a Covid-19 vaccine development programme.
Is Sun Pharma’s core business keeping it busy?
While Sun Pharma could still surprise with a possible vaccine distribution deal, so far it has largely stuck to its core business.
“Sun Pharma is in the midst of executing the rollout and ramp-up of a specialty drug portfolio, where it is investing $300-400 million per annum; maybe they don’t want to dilute their long-term focus,” said Amey Chalke, Vice President at Haitong Securities India.
Dilip Shanghvi, the founder and managing director of Sun Pharma, has set his sights on transforming the pure-play generic drugmaker into a specialty drugs-driven generics company.
The drugmaker has invested around $1 billion in the specialty business in the US, and has so far found it to be a mixed bag due to competition, higher marketing and distribution expenses, and gradual off-take in prescriptions of its products.
Read about the challenges the company faces in building a specialty business.
But there are other pressing challenges that Shanghvi is trying to address.
Sun Pharma’s largest manufacturing site in Halol, Gujarat, is under the USFDA scanner, stymieing approvals in the US, which are critical for its revenue growth, amid intense pricing pressure.
“Addressing those issues would be a near-time priority for the company,” said Chalke.
Those issues remain an overhang on its stock as well. Sun Pharma’s shares have risen only by 8.71 percent since January 1 on the BSE, while the BSE Healthcare Index has gained a whopping 46.44 percent.
Focus on chronic
Marketing research experts like Hari Natarajan, Founder and Managing Director of Pronto Consult, say that Sun Pharma, at heart, remains a chronic disease-driven company, despite having an exhaustive portfolio of acute drugs gained through the acquisition of Ranbaxy.
“For instance, Sun Pharma launched the cheapest drug Favipiravir for Covid-19, but its campaign isn’t a high-decibel one like the others,” Natarajan said.
Chronic drugs refer to cardiac, diabetes, neuro-psychiatry drugs, among others, where the patient has to take medication for life or an extended period of time, while acute drugs include anti-infectives and anti-pain drugs that are taken for a shorter duration.
Covid-19 drugs fall in the acute segment.
Shanghvi was the among the earliest Indian pharma entrepreneurs to realise the importance of chronic drugs. But cracking this segment would require sustainable engagement with doctors to get more prescriptions. This is where Sun Pharma excelled. Once it cracked the market for chronic disease drugs there was no looking back.
Sun Pharma became the biggest Indian drugmaker following its acquisition of Ranbaxy from Daiichi Sankyo.
This made Shanghvi, who started out humbly — his father was a distributor in Kolkata’s Dawa Bazar, dealing with Torrent Pharma drugs and the erstwhile Tamilnadu Dadha Pharmaceuticals Ltd —the richest Indian in March 2015.
Interestingly, in later years, Sun Pharma acquired Tamilnadu Dadha Pharmaceuticals, and outgrew Torrent Pharma.
Sun Pharma had revenues of Rs 32,838 crore in FY20, with a profit of Rs 4,186.8 crore. The US accounts for one-third of its sales, and India about 30 percent.
Why has Sun Pharma kept away from vaccines?
Vaccine making was never Sun Pharma’s forte. But that didn't stop other drugmakers both in India and globally jumping in due to the exceptional need for a vaccine against the coronavirus that causes Covid-19.
A top executive at a vaccine company says that Sun Pharma hasn’t played its role to the extent that one would expect from an industry leader.
“It could be due to limitations when it comes to capabilities in biotechnology required to make vaccines. Or it could be simply about being risk-averse and not getting into something that you are not familiar with," the above executive said.
“But they can still get into distribution of vaccines, because of their reach in terms of supply chain and distribution,” the executive added.
Sun Pharma’s spokesperson declined to comment on possibilities of the drugmaker getting to any vaccine manufacturing and distribution agreements.