sun pharma to acquire dusa pharmaceuticals, page-2

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Sun Pharmaceutical/Dusa Pharmaceuticals: India’s largest drug maker by market cap, Sun Pharmaceutical, acquired U.S.-based specialty dermatology company Dusa Pharmaceuticals, a step it said will help build a global specialty dermatology business. The deal valued Dusa at $230 million, which translates to about 4x sales and 36x annualized after-tax profits based on 1H12 figures. Sun marked the deal as a departure from the company’s usual strategy, which is to acquire distressed assets. Also, Sun struck a conservative agreement that gives it market depth compared to a jump in its top-line. In an earlier interview, Sun Pharma Managing Director Dilip Shanghvi tempered expectations of any large deals. Dusa drew most of its $45 million revenues last year from Levulan, a single drug-device combination therapy for treatment of non-hyperkeratotic actinic keratosis, or AKs, of the face or scalp. Actinic keratosis is a common precancerous skin condition caused by excessive exposure to ultraviolet light and made up of rough, dry, tan- or pink-colored blemishes that often appear on facial skin or other skin exposed to sunlight. Founded in 1991, Dusa had a long gestation and only turned profitable in 2010. In addition to Levulan, it sells Blu-U, a blue light device used to treat moderate inflammatory acne vulgaris and general dermatological conditions. With the acquisition, Sun said it expects to provide about five million treatments per year in the U.S. Shanghvi pegged the market at well over $1 billion, adding that the cost of treatment is a factor for the number of treatments received.-- Vikas Dandekar

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