Sun Pharmaceutical Considers $10 Billion Acquisition to Enhance US Presence

Sun Pharmaceutical Industries Ltd, India's largest drugmaker by market capitalization and revenue, is assessing the acquisition of US-based Organon, a women's health-focused pharmaceutical company with a growing biosimilars portfolio, people aware of the matter told The Economic Times. The move comes almost a decade after Sun Pharma's landmark purchase of Ranbaxy.

The proposed transaction, estimated at around $10 billion including debt, could emerge as the boldest acquisition yet by Sun Pharma founder Dilip Shanghvi, 70, who is widely regarded for his sharp deal-making skills, The Economic Times reported. If completed, it would also be the biggest cross-border acquisition in India's pharmaceutical sector and significantly strengthen Sun Pharma's footprint in the US market. One of the sources described the deal as potentially transformative for the company.

The Economic Times learnt that Sun Pharma has engaged a European bank as an advisor to structure a comprehensive financial proposal that may be presented to Organon's board. Organon was carved out of MSD (Merck Sharp & Dohme) in 2021 and began operations with $9.5 billion in inherited debt. Since then, it has pursued inorganic growth, including the $1.2 billion acquisition of Dermavant from Roivant in September 2024, which further stretched its balance sheet. Organon's debt stood at $8.9 billion at the end of the second quarter of 2025, and the company has been divesting non-core assets to pare leverage.

On the NYSE, Organon's market capitalization is about $2.28 billion, with its stock closing at $8.76 on Friday, well below its peak of $17-18 in November 2024, The Economic Times noted. The shares have gained over 28% in the past month amid expectations of a sale, after plunging nearly 21% in October following reports of sales malpractices. Former CEO Kevin Ali stepped down soon after, with Joseph Morrissey taking charge as interim chief executive while the search for a permanent leader continues.

For the third quarter of 2025, Organon reported revenue of $1.60 billion, a 1% increase on an as-reported basis, The Economic Times said. The company trimmed its full-year revenue guidance to $6.20 billion and lowered its adjusted EBITDA margin outlook to about 31%. In FY24, Organon posted revenue of $6.4 billion and EBITDA of $1.95 billion.

Sun Pharma, with a market capitalization of roughly $45 billion, recorded FY25 revenue of Rs 52,041 crore ($6.19 billion) and EBITDA of Rs 15,300 crore ($1.82 billion), marking a 17.3% rise, according to The Economic Times. Sources said Sun has been in discussions with Organon since the US firm intensified its divestment efforts. Last November, Organon agreed to sell the JADA postpartum hemorrhage treatment system to Laborie Medical for up to $465 million, as it shifted focus back to women's health biopharma. Nexplanon remains Organon's top-selling product, generating about $179 million in revenue in the second quarter of FY25.

Earlier talks stalled over valuation concerns, but negotiations have resumed after Organon's share price halved, The Economic Times reported. It remains unclear whether Sun Pharma would pursue an all-cash deal or a mix of cash and stock. Sources cautioned that there is no certainty of a deal, and a competitive bidding process is possible.

Sun Pharma declined to comment on market speculation, while Organon did not respond to queries, The Economic Times said.

Industry experts cited by The Economic Times believe Sun Pharma's turnaround expertise makes it a suitable suitor for Organon, pointing to past successes with Taro and Ranbaxy. One executive indicated that Shanghvi's son, Aalok, could relocate to the US if the acquisition materializes. The combined entity's pro forma leverage is expected to be around 2.5 times net debt to EBITDA, adjusted for Sun Pharma's cash reserves of approximately Rs 20,000 crore. Sun's standalone debt is minimal at Rs 2,362 crore, as per its FY25 annual report.

Biosimilars and Portfolio Expansion

The Economic Times highlighted that the global biosimilars market is dominated by a handful of players accounting for nearly 70% of sales, including Sandoz, Pfizer, Amgen, Samsung Bioepis and Biocon. Organon, partnered with Samsung Bioepis for biosimilar manufacturing, was previously rumoured to be a takeover target for the South Korean firm, though this was later denied.

Sun Pharma already has a portfolio of about a dozen branded products in the US and is seeking to scale further. Its innovative pipeline includes at least six advanced-stage candidates, including a weight-loss drug in early trials. An Organon acquisition would help Sun expand into women's healthcare and biosimilars-segments seen as high-margin and less crowded-experts told The Economic Times.

In FY25, Sun Pharma's US innovative products revenue rose to $1.21 billion, driven by its psoriasis drug Ilumya. Other key brands include Leqselvi, Sezaby, Winlevi, Odomzo, Cequa and Yonsa. Organon, meanwhile, derives most of its sales from women's contraception and fertility products such as Nexplanon, Nuvaring, Marvelon and Follistim, along with a biosimilars portfolio that added about $660 million to sales last year.

This could be an orbit-changing move, positioning Sun Pharma as a stronger branded and innovative drugmaker, one executive told The Economic Times, adding that women's healthcare and biosimilars are gaps in Sun's US portfolio.

R&D Legacy

Organon has indicated to investors that from 2026 onward it plans to expand core EBITDA, accelerate growth drivers and strengthen its R&D pipeline, The Economic Times noted. The company has a storied research legacy-Merck's blockbuster cancer drug Keytruda traces its origins to Organon's European labs.

Sun Pharma has also been actively expanding its innovation capabilities. In 2025, it acquired Checkpoint Therapeutics for $416 million, gaining access to advanced cancer immunotherapies, and earlier bought Concert Pharma for $576 million to secure rights to the alopecia drug Leqselvi, The Economic Times reported.