Shares of both Sun Pharma and Ranbaxy jumped 3 percent each, touching all-time high of Rs 942 per share and Rs 728 respectively on Monday. The US Federal Trade Commission has approved the pharma major’s plan to buy Ranbaxy on the condition that it divests one antibiotic product to avoid anti-competitive impact in the US market.
Torrent Pharma will acquire Ranbaxy's minocycline business in the US. Generic minocycline tablets are used to treat a wide array of bacterial infections, including pneumonia, acne, and urinary tract infections.
According to the FTC's complaint, the proposed merger may harm future competition by reducing the number of suppliers in the US markets for three dosage strengths (50 mg, 75 mg, and 100 mg) of generic minocycline tablets. Ranbaxy is currently one of three suppliers of the products, while Sun is one of only a limited number of firms likely to sell generic minocycline tablets in the United States in the near future. Sun's entry likely would have resulted in significantly lower prices for these drugs. Sun-Ranbaxy is currently also in the process of divesting seven brands in India as per the CCI order.
The Sun-Ranbaxy merger now needs approval from just the Punjab and Haryana High Court. The court will be hearing on the merger on February 2. Sun Pharma had agreed to buy Ranbaxy from Japan's Daiichi Sankyo in April.
At 09:24 hrs Sun Pharma was at Rs 938.85, up Rs 22.90, or 2.50 percent while Ranbaxy was at Rs 726.00, up Rs 22.35, or 3.18 percent on the BSE.
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