Sun Pharma, India‘s largest drugmaker, is looking at acquisitions to boost its specialty pipeline and strengthen emerging markets business. “Our focus on M&A will be on augmenting the pipeline for specialty and further strengthening our footprint in emerging markets,” said CS Muralidharan, chief financial officer of Sun Pharma.

Muralidharan said he doesn’t see any problem raising funds for acquisitions, if the asset justifies the company’s strategy.

“We have a good balance sheet, we are not at all leveraged, so there is ample headroom to go and source funds from the market,” Muralidharan said.

“If the right candidate comes, we will look at it,” Muralidharan added.

Sun Pharma has $1.5 billion net cash at the consolidated level at the end of March 31, 2023.

Sun Pharma is betting big on specialty medications as it tries to diversify from generic drugs that are facing intense competition and price erosion in markets like the US and Europe. Specialty medicines target unmet medical needs or have differentiated dosage form or delivery mechanisms to enhance convenience to patients, but unlike generic medicines require significant investments on marketing and sales. Sun Pharma is targeting dermatology, ophthalmology and derma-oncology for its specialty bet.

Sun Pharma has pumped in about $1.6 billion into the specialty segment including its recent acquisition of US-based Concert Pharmaceuticals for $576 million. Concert acquisition gave Sun Pharma’s the former’s lead product candidate deuruxolitinib, which is in late-stage development for the treatment of baldness.

Sun Pharma is seeing good traction in its global specialty drug sales, which grew 29% year-on-year (YoY) to $871 million in FY23. Ilumya alone contributed more than half of specialty sales at $477 million. Contribution from the specialty segment more than doubled in the last five years, constituting 16.2% share of total revenues in FY23, which was around 7% in FY18.