Shanghvi Gives Sun An M&A Dose Of Growth

THE ‘RELUCTANT BILLIONAIRE’ is an apt title for the immensely private founder and CMD of Sun Pharmaceutical Industries, Dilip Shantilal Shanghvi. From founding Sun Pharma in 1983 to it becoming the first Indian pharma company to clock $5 billion in valuation, Shanghvi has grown Sun through a series of acquisitions, the biggest of them being the purchase of rival Ranbaxy Laboratories for $4 billion.

Sun Pharma is the fourth-largest specialty generic pharmaceutical company in the world with global revenues of $5.4 billion, 43 manufacturing facilities and 41,000 employees.

The son of a wholesale drug distributor, Shanghvi launched Sun Pharma soon after graduating (1982) from the University of Calcutta with a bachelor’s degree in commerce. He started by helping his father in his business — wholesale dealership of medicines, mainly generic drugs — in Kolkata, and soon launched his first manufacturing unit at Vapi in Gujarat with ₹10,000 borrowed from his father. The unit, which began with the production of just one psychiatry drug, today manufactures products sold in over 100 countries.

A sharp understanding of the business and the market led Sun to open its own research and manufacturing facilities in the early 1990s. Soon, additional product lines, in the fields of cardiology and gastroenterology were added to its portfolio. In 1994, Shanghvi took the company public. Three years later Sun Pharma made its first international acquisition when it bought Detroit-based Caraco Pharmaceutical Laboratories. It also picked up stakes in leading Indian drug manufacturers, Tamil Nadu Dadha Pharmaceuticals and MJ Pharmaceuticals.

Under Shanghvi’s leadership, Sun Pharma acquired more than a dozen companies and brands between 1999 and 2012. Sanghvi’s tenacious bet was visible way back in 2010 when he took controlling stake in Taro Pharmaceutical Industries following a three-year takeover battle, and immediately doubled its U.S. revenues to more than $1 billion. In 2015, he oversaw the completion of the $4 billion acquisition of generic drug rival Ranbaxy Laboratories from Japan-based pharmaceutical giant Daiichi Sankyo. The deal made Sun Pharma the fifth-largest generic drug producer globally as well as the largest domestic pharmaceutical company. In 2023, it completed the $576 million acquisition of U.S. based Concert Pharmaceuticals, adding a biotech firm with a promising new product for treatment of alopecia in the pipeline. Last month, the product received USFDA approval.

Shanghvi always combined inorganic and organic growth to achieve scale. He strengthened Sun Pharma’s pipeline through acquisitions such as the Uractiv portfolio from Romania-based Fiterman Pharma. The portfolio comprises food supplements, including minerals, vitamins and adjuvants, and cosmetics and medical devices used for maintaining urinary tract health. It has 12 stock keeping units (SKUs) and $8.7 million in annualised revenue.

After acquiring Japan-based Pola Pharma in 2018 to add to its dermatology segment, Sun Pharma launched ILUMYA (tildrakizumab injection), first in Japan and then in Canada, to manage plaque psoriasis. Recently, it received approval for marketing it in China as well. Similarly, the company has also launched WINLEVI (clascoterone) cream in the U.S. for topical treatment of acne vulgaris. It has also entered Greater China through partnership with China Medical System Holdings.

Besides pharma, Shanghvi has invested in Suzlon Energy and runs AIRA Matrix, a company that provides AI solutions for life sciences applications. AIRA Matrix, funded by the Shanghvi family office, offers products and services to improve efficiency, diagnostic accuracy and turnaround times in pathology workflows, among others.

Shanghvi was honoured with the Padma Shri in 2016, in recognition of his contribution to Indian trade and industry. In 2018, the government appointed him to the Reserve Bank of India’s 21-member central board committee. Shanghvi is also part of the Maharashtra government’s Economic Advisory Council, and the chairman of Gujarat Biotechnology University.