Taro Pharmaceutical (TARO) , a subsidiary of India's Sun Pharmaceutical Industries, on Wednesday appointed Uday Baldota as CEO and nominated him to Taro's board of directors.
Baldota's appointment comes as Sun and its U.S. unit face a probe from the U.S. Department of Justice over whether it and other generic companies colluded to raise prices. More than a dozen companies are involved in the investigation. Sun acquired a controlling interest in Taro in 2010.
He is expected to begin his new role on or about April 1, 2017, and will focus solely on the Taro business. He currently is Sun's CFO. Baldota's nomination to Taro's board must be approved at the company's annual shareholder meeting next month.
In May, Sun said the U.S. Department of Justice has subpoenaed it, seeking information about the pricing and marketing of the generic drugs it sells in the country. In September, Taro said the company and two of its senior officers received grand jury subpoenas related to antitrust investigation.
Kal Sundaram, the CEO of Taro, will step down by the end of this year and return as the head of Sun's business and emerging markets. An interim CEO will manage Taro's business during the three months before Baldota arrives at Taro's Hawthorne, N.Y. headquarters.
Most of Baldota's 20-plus year career has been spent at Sun and he has an MBA from the Indian Institute of Management and a chemical engineering degree from the Indian Institute of Technology.
In addition to Baldota, Taro Chairman Dilip Shanghvi has nominated to Taro's board Abhay Gandhi, Sundaram's successor as the CEO of Sun North America, is also being nominated to the Board and is expected to also serve as Vice Chairman of Taro's board. Abhay has held several leadership positions within the Sun organization, most recently as CEO of Sun's India business.
In line with its strategy of investing in emerging markets, Sun said Wednesday it has reached an agreement to buy an 85.1% stake in JSC Biosintez, a Russian pharmaceutical company focused on the hospital segment.
The transaction price includes a $24 million equity consideration and the assumption of about $36 million in debt.
Biosintez generated $52 million in revenue during 2015 and focuses on the Russian market and neighboring states. The company primarily serves the hospital market and has a manufacturing facility in Russia's Penza region, with capabilities to develop various dosage forms including pharmaceuticals for injections, blood preservatives, tablets, ointment, creams, among other things.
The transaction is expected to closed by the end of 2016, subject to the approval of the Russian Federal Anti-Monopoly Service and other closing conditions.
For Sun, India's largest pharma company, the deal follows its $40 million purchase of dry eye disease drugmaker Ocular Technologies Sarl from Auven Therapeutics Holdings LP in October. Sun trades on the National Stock Exchange of India.
Aalok Shanghvi, head of Emerging Markets, Sun Pharma, said the acquisition fits with Sun's plan to invest in strategic Emerging Markets. This transaction gives us access to local manufacturing capability across multiple dosage forms in Russia, enabling us to serve the Russia pharmaceutical market more effectively."
Artur Valiev, head of Sun Pharma, Russia said the acquisition "signifies Sun Pharma's commitment to Russia and the Russian 2020 plan for localization." The Russian pharmaceutical generated sales of approximately $ 10 billion over the previous 12 months and at a 7.4% pace.
Battered by low prices for commodity exports, the Russian government has embarked on a plan to produce more finished goods, including pharmaceuticals. The aim is to reduce its reliance on imported finished goods from 70% to 90% today to 50% to 60% by 2020.