The Hindu Business Line : Sun Pharma’s de-merged arm gets listed at Rs 87.15 on BSE

The de-merged innovative research company Sun Pharma Advanced Research Company Ltd (Sparc) made its debut on the BSE and NSE on Wednesday, making it the first research company to get listed on an Indian stock exchange. The company listed at Rs 87.15 on the BSE and Rs 87.20 on the NSE, giving the fledgling company a market-cap of about Rs 1,691 crore.

The promoters would hold about 67 per cent in the innovative company, mirroring the holding-pattern in the parent company and shareholders get one equity share in the new company for every share held in the parent company.

When Sun Pharma had announced its decision to de-merge late last year, the Chairman and Managing Director, Mr Dilip Shanghvi, had indicated that the rationale behind the decision was because the risk-profile and skill-sets were different in an innovative business. In the innovative business, the fund requirement escalates as the product developed, and yet the product may not eventually hit the market, he had explained.

About Rs 200 crore in cash and Rs 50 crore in assets would be transferred, over a period of time, to the innovative company, he had said, adding that the research company would attract sector investors interested in speciality-pharma.

The revenue model for Sparc would be through out-licensing prospective products developed by them to other drug-makers including the parent company. A company official indicated that the parent company would pay a licence fee to the research company when it uses technology developed by the latter. Research for the generics business, which drives current performance, will remain with the parent, Sun Pharma.

Phase-II Trials

More than 160 people have been transferred from the parent company to Sparc, and scientists form a large part of this group, a company official said.

Sparc’s product-pipeline includes an anti-histamine product, for seasonal and perennial allergies, that is undergoing Phase II trials in the US, a prospective asthma drug, an earlier stage of epilepsy compound Gabapentin, besides four drug delivery systems. The drug delivery system projects are in the areas of dry powder inhalers, gastric retention systems, biodegradable implants and targeted drug delivery, the note said.

Another drug-maker that has sought to cushion its research-related risks is Dr Reddy’s Laboratories. The company had roped in ICICI Venture to support risk and litigation-ridden drug research initiatives. Subsequently, to further fast-track drug development, it formed an integrated drug development company Perlecan Pharma Pvt Ltd.

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