Dilip Shanghvi has built Sun Pharma by making bold bets. And he's not done yet
While others played safe, Shanghvi bet on complex generics and specialty pharma, and rode a wave of acquisitions to make Sun Pharma a global force. Now, as stakes rise, he is placing bigger and bolder bets
- By: Naini Thaker
- Published:
- 30/04/2025 11:23 AM
In his 42-year journey of building Sun Pharma from the ground up, there is only one thing Dilip Shanghvi would do differently.
“Sometimes I would have got angry… That I wouldn’t have wanted to do. Other than that, nothing,” says the 69-year-old chairman and managing director of Sun Pharma, India’s largest pharmaceutical company.
The root of this regret goes almost as far back as the origin story of the company. Shanghvi’s father, who was into pharma trading, would tell him: “You don’t need to shout to be heard. When you get angry, you lose control over yourself, and I think then you are giving control to the other person.”
It was his father who gave a young Shanghvi $200 to start Sun Pharma in 1983 to make psychiatric drugs: The small first step of a giant leap that sees Shanghvi ranked 79th in Forbes’s 2025 list of world’s billionaires. Interestingly, as the market volatility played out in April across the globe, Shanghvi’s wealth rose from $24.9 billion on April 1 to $27.4 billion on April 17—the day this story was finalised—raising his global rank among billionaires to 65th.
The acquisitions include the scandal-ridden Ranbaxy Laboratories for $4 billion.
At present, pharma stocks are doing well because they have been kept out of US President Donald Trump’s reciprocal tariffs. But uncertainty looms: On April 14, the Trump administration said it had started examining pharmaceutical imports as a possible prelude to tariffs.
This comes at a time when Shanghvi’s strategy is becoming bigger and bolder.
Sun Pharma is making tactical moves to reinforce its leadership in specialty pharmaceuticals while accelerating global expansion. On March 10, it announced the acquisition of Nasdaq-listed Checkpoint Therapeutics, Inc for $355 million. The acquisition bolsters Sun Pharma’s portfolio of treatments for advanced skin cancer—a high-value therapy.
A recent US court ruling has paved the way for the launch of Leqselvi, a breakthrough dermatology drug for severe alopecia areata, facilitating Sun Pharma’s expansion into specialty markets. Analysts project Leqselvi will generate more than $500 million in revenue by FY30, underscoring substantial growth opportunities. Coupled with aggressive R&D investments—currently at 6.7 percent of revenue—and a growing presence in key regulated markets such as the US and Europe, these moves mark another inflection point in Sun Pharma’s trajectory.
Soon, you might also get to hear about a new weight loss medicine that is showing promising results in early clinical trials.
Shanghvi’s unassuming self comes to the fore when you tell him you are trying to understand his thinking process as a leader.
“Once you find out, tell me,” he says with twinkling eyes and a chuckle. "I have always been guided by a long-term vision—one that looks beyond immediate wins and focuses on sustainable growth. My philosophy in life is simple: Stay humble, never let success become a crown, or failure weigh you down.” Which takes us back to the origin story.
Char din mein launch
Shanghvi wanted to grow beyond his father’s pharma trading business. He wanted an outcome with longer-term benefits and higher returns. That is how in 1983, at age 27, he started Sun Pharma with a two-person marketing team. Looking at an old photograph of the company’s first manufacturing plant for tablets and capsules at Vapi, Gujarat, he chuckles: “I had some more hair on the head back then.”
That is another disarming statement which, in its own way, underlines the frenetic pace he set from early on.
Abhay Gandhi joined the company as senior manager-marketing in 1994, when it had a turnover of ₹43 crore, in the three-month-old cardiovascular segment. “I distinctly remember my first month,” says Gandhi, now CEO of the North America business. “The target was ₹93 lakh, and I ended at ₹89 lakh. Achieving 90 percent of your goals made you a hero back then. We were growing rapidly, and it was common to see quarter-on-quarter growth of 40 to 50 percent.”
He recalls how the team would work seven days a week. “We were told, ‘char din mein product launch karna hai’ (we must launch the product in four days),” he recalls.
A couple of years later, in 1996, Kirti Ganorkar joined as Shanghvi’s executive assistant. By that time, the company had reached ₹80 crore in revenue. Today, as the CEO of India business, he reflects on those early years with a laugh: “At the time, we were wondering how we would reach ₹100 crore in revenue.”
Sun Pharma’s current market capitalisation is ₹410,670 crore (at the time of writing) and its net cash position is robust at approximately $3 billion (first half, FY25).
Also read: How acquisitions turned out to be Sun Pharma's winning strategy
Eye on chronic ailments
While most Indian pharmaceutical firms were focussed on acute diseases, Shanghvi saw the potential in lifestyle and chronic disease treatments.“It (chronic) was a small category at the time, but he remained focussed on it until acquiring Ranbaxy in 2015, when the focus expanded. “Looking back, that decision played a crucial role in our success—once you establish a presence in chronic therapies, both the patient and doctor remain with you for the long term,” Ganorkar explains. Chronic conditions require ongoing management and treatment.
Soma Das’s book on Shanghvi, The Reluctant Billionaire, recounts a conversation in the late 1990s between Rajesh Kikani—who spent more than a decade at Alembic Pharma—and Shanghvi. Kikani asked: “Where do you see your company in 10 years?”
Without hesitation, Shanghvi replied, “In the top 10 by 2000.”
Sceptical, Kikani questioned how that would be possible. Shanghvi broke down the logic. At Alembic, a prescription for three expensive products amounted to ₹200. In contrast, “Sun Pharma’s prescription value would be at least 300 times that of an acute drug prescription, which rarely exceeds ₹50. And we are not aiming for a one-time prescription. Antibiotics, even when given for a full cycle, generate business for just two weeks. My products are lifetime drugs.”
Ranbaxy twist
Even the most carefully laid plans are not immune to setbacks. As Sun Pharma grew, it faced a tough phase between 2014 and 2018, a period marked by integration challenges, regulatory hurdles and shifting market dynamics.
In April 2014, Sun Pharma announced the acquisition of Ranbaxy in an all-stock deal valued at $4 billion. By the time the merger was completed, in March 2015, Sun Pharma had become the world’s fifth-largest generic pharmaceutical company by revenue.
The transition was anything but smooth.
“We did the Ranbaxy acquisition and overnight the size of the business doubled,” Shanghvi recalls. However, with the merger came disruptions. The business doubled, and so did the number of plants and workforce. The senior management had to learn on the job.
At the same time, the US generic market was undergoing a transformation. Sun Pharma, like many others, faced pricing pressures that eroded profitability. "Because of the price erosion in the US generics industry, between Sun Pharma, Ranbaxy and Taro, we lost almost a billion dollars in top-line, without any change in volume. This directly impacted our profitability, so we had to rebuild our profit stream," Shanghvi explains.
Ranbaxy’s legacy regulatory issues added another layer of complexity. Sun Pharma had to implement strict quality controls and streamline manufacturing processes to meet global compliance standards. Ensuring a smooth transition while tackling these meant the company had to rebuild its profit streams from scratch.
Reinventing the business model
Shanghvi doubled down on complex generics and specialty products—segments that could deliver long-term growth and not be too affected by price fluctuations. “Additionally, there was also a significant increase in profit from the emerging market business and growth in the India business, including improving profitability of the business we acquired in Ranbaxy,” Shanghvi says.
By developing these new verticals, he carved out a path for what ultimately became Sun Pharma’s second innings—a reinvention of its business model. After 2014, it forayed into in-licensing deals with global pharma companies, getting to launch innovative therapies not just in India or emerging markets, but also in the highly competitive US specialty segment. Most Indian pharmaceutical firms were out-licensing their drug discovery products, but Sun Pharma’s in-licensing pacts gave it access to high-value specialty portfolios without having to develop them in-house.
Thus, Sun Pharma acquired worldwide rights to Ilumya from Merck for $80 million in September 2014. At the time, the drug was in Phase III clinical trials, with Merck continuing its development and regulatory activities, funded by Sun Pharma. In 2018, the US Federal Drug Administration (FDA), the country’s drug regulator, approved Ilumya for moderate-to-severe plaque psoriasis, marking one of Sun Pharma’s significant specialty launches in the US.
September 2023 saw an agreement with Pharmazz Inc for Tyvalzi, which treats acute cerebral ischemic stroke, offering a treatment window of up to 24 hours after onset of symptoms. The deal granted Sun Pharma rights to market the drug in India. Pharmazz retained global development rights.
Riding on acquisitions
As far back as 1997, before overseas acquisitions became a thing for India Inc, Sun Pharma made its first, acquiring US-based Caraco Pharmaceutical Laboratories to mark its entry into the North American generics market. The 2010 acquisition of research-based Israeli company Taro Pharmaceuticals doubled its US business. Pola Pharma in 2019 solidified its foothold in Japan.
The most recent, Checkpoint, is being seen by analysts as enabling Sun Pharma to enter the high-growth PD-L1 inhibitor market and help bolster its innovation portfolio in onco-derm therapy.
Acquisitions such as Dusa Pharmaceuticals in 2012, Concert Pharmaceuticals in 2023, and of Checkpoint underscore the commitment to advancing in oncology, dermatology and immunotherapy. Gandhi says: “Consolidation on the generics side is difficult due to the high overlap of products. But with specialty, we are looking at M&A opportunities, where we can strengthen our pipeline, increase our geographical footprint to achieve our strategic objectives.”
That indicates Sun Pharma’s appetite is far from sated.
"A strong net cash position and an ongoing strong free cash flow generation enable them to successfully drive their ambitions around inorganically strengthening their specialty business globally," says Vishal Manchanda, senior vice president, Institutional Research, Systematix Group.
Innovation at the core
Sun Pharma’s research journey began even before its first overseas acquisition. In 1991, it set up its first research centre. By 2004, it had started a second centre and was dedicating 8 to 9 percent of its turnover to R&D, ensuring a pipeline of high-value products.
“Philosophically we look at our business as a business that helps patients in our markets, solves complex disease problems. So, there will be many products which were either available at a very high price or not available—and we will focus on them and how can we bring this product to market faster,” says Shanghvi.
Sun Pharma was an early mover in complex generics, launching differentiated products ahead of competitors. By FY24, its complex generics portfolio had 80 to 120 products globally. The same year, it invested ₹3,178 crore in R&D—6.7 percent of its sales. Though this is a substantial commitment, Shanghvi acknowledges the need for more investment: “In terms of percentage, there are many other pharma companies, who spend much more than what we spend. My focus is how can I find a way to spend more on R&D, so that we can find a way to continue to grow faster.”
He balances the investment strategy across short-term, medium-term and long-term projects. “Our investments, for instance, in the several New Chemical Entities (NCEs) such as GL0034 designed to treat Type 2 diabetes and obesity would be a long-term investment. When it is launched, it could potentially change the complexion of the company,” says Shanghvi.
GL0034 (Utreglutide) has already shown significant weight loss and improvements in glucose metabolism and lipid levels in obese patients. The company is aiming to launch the drug within five years.
Scaling up
In its first decade, Sun Pharma focussed primarily on India and the US. “I would travel to the US very often to understand that market. It was a challenging market since nobody could really understand the FDA’s requirements,” recalls Ganorkar.
At that time, only a handful of Indian companies, such as Ranbaxy and Dr Reddy’s Laboratories, had filed for abbreviated new drug applications, or ANDAs, which are requests to the FDA to sell a generic drug in the US.
Between 2000 and 2005, Sun Pharma faced tough years in the US. The company continued expanding its footprint in India, entering new therapeutic areas beyond neuropsychiatry. “Sun Pharma started by launching neuropsychiatric drugs. Later, we entered cardiology, diabetology and gastroenterology, among others,” says Ganorkar. The results included blockbusters such as Pantocid. Launched in 1999, it started as a ₹3 crore brand. Today, it is worth ₹600 crore.
By FY24, the India business contributed 31 percent of Sun Pharma’s turnover, driven by strong growth in branded generics over the previous four to five years. Upon becoming CEO of the India business, Ganorkar’s objective was clear: To outpace market growth across the spectrum.
The company boasts a field force of nearly 14,000 people. Ganorkar also collaborates with Indian physicians and doctors to generate patient data, a strategy that has refined treatment approaches.
Patient before profit
Sun Pharma launches 30 to 40 products annually—a pattern it has followed for more than 15 years. Of the 19 therapy areas it operates in, it leads in 13.
Since taking charge of Sun Pharma’s India business, Ganorkar has overseen nearly 400 product launches. “New products give our field force something new to talk about. Our differentiator is that we target being first-to-market for any new product—and first to reach the doctor for that product,” he says.
The company was among the first from India to crack the US market. By FY24, the US accounted for 32 percent of its revenue, with 13.4 percent annual growth, largely driven by the specialty business—a segment that includes high-cost, complex medications designed for chronic, rare or life-threatening conditions. It wants to double down on dermatology, ophthalmology and oncology within its specialty portfolio.
“Over the past few years, Sun Pharma’s dependency on the US generics has declined. It has been focusing on its specialty portfolio, which includes high-entry-barrier products. This strategy has helped them improve their margins significantly over the past few years,” says Kushal Shah, research analyst, PL Capital.
While the specialty business continues to expand, the US generics segment faces pricing pressures and slow growth. Six years ago, the US generics market was worth $50 billion, and it has remained at that level. “There has been no growth in the overall market, despite the addition of a thousand new products,” Gandhi says.
Despite the stagnation, 90 percent of US prescriptions remain generics, meaning Sun Pharma has no intention of scaling down that side of the business. The US generics segment still accounts for roughly 20 percent of its revenue.
Gandhi believes Sun Pharma could have moved into specialty sooner. “Secondly, we could have invested in clinical trials for newer indications sooner than what we have done,” he says. However, “Eventually, the key is that as a company we got most things right, if not all things right.”
Looking back, Shanghvi credits a lot of Sun Pharma’s success to “being in the right place at the right time”, Finally, how does he feel about being one of India’s richest people? “I have never worked with making money as an objective," says Shanghvi. "My focus has always been on doing what we do well and continuously improving, year after year.”