Dilip Shanghvi - Sun Pharmaceutical

His is more than a generic success story

Name: Dilip Shanghvi
Title: Managing Director, Sun Pharma

India supplies roughly 40% of the generic and over-the-counter drugs in the U.S., and with his $4 billion deal to buy Ranbaxy Laboratories, Dilip Shanghvi solidifies the position of Sun Pharmaceutical as the largest Indian drugmaker in the U.S. market. He is also in a place where he can go a long way toward restoring India's reputation as the go-to place for cheap but quality generics if he can quickly resolve the manufacturing shortcomings that have besmirched Ranbaxy for a decade.

The combo of Sun and Ranbaxy creates a significant force in the world market by any number of measures. It is now India's largest drugmaker, the largest Indian drugmaker selling into the U.S. market and the fifth-largest generic company globally with combined sales of $4.2 billion. That compares to Teva Pharmaceutical Industries ($TEVA), which claims the title of largest generics maker in the world and last year had revenues of $20.3 billion. Even if it is smaller than generic drugmakers like Teva or Mylan ($MYL), it puts the company in a position to influence generic pricing in the U.S. market.

Shanghvi, who started Sun in 1982 with an investment of a couple of hundred dollars, is a savvy operator. He has done more than a dozen deals in the last 15 years or so to build Sun into a major player, including a drawn-out battle with Israeli drugmaker Taro Pharmaceuticals to get control of it. Several years ago, he set his sights on getting a bigger piece of the U.S. market and many observers thought that meant buying a U.S. company. The all-stock deal for Ranbaxy gives him a much bigger slice of the American pharma pie at a very cheap price, something investors have taken notice of.

Shares in Sun have soared since the deal was announced, up 50% for the year, making Shanghvi the richest man in India, according to recent calculations by the Times of India. It said the market value of his 63% ownership in Ranbaxy, Sun and the separate R&D operation, Sun Pharma Advanced Research, totaled about $23.4 billion. That elevated him past Mukesh Ambani, who controls Indian energy company Reliance Industries, and whose market holdings add up to $21.2 billion, the newspaper figured.

Whether Shanghvi can also save India's generic industry from itself has yet to be seen. Ranbaxy ran afoul of the FDA years ago when the agency found it cutting corners by fudging data about whether drug batches met FDA standards. In the last couple of years, FDA inspectors found that other Indian plants operated by companies headquartered both in and out of the country, including Sun itself, were doing the same thing. If Shanghvi quickly acts on his pledge to restore Ranbaxy's standing with the FDA, India's largest drugmaker could become the standard bearer for the Indian industry.

-- Eric Palmer (email | Twitter)

For more:
Sun billionaire Shanghvi becomes India's richest person
Sun Pharma hopes to turn fortunes of Ranbaxy around with $3.2B buyout
Sun to benefit from Doxil shortage, but CEO eyes deals for bigger growth

Dilip Shanghvi - Sun Pharmaceutical

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