Sun Pharma Invests $25 Million in Pharmazz Inc, Boosts Stake to 22.7%

Sun Pharmaceutical Industries Ltd announced on Friday its plan to invest up to $25 million in US-based Pharmazz Inc, a clinical-stage biopharmaceutical company. This investment will increase Sun Pharma’s stake in Pharmazz to 22.7%. The deal was disclosed in a stock exchange filing, detailing that the investment price is set at $5.88925 per share in cash. Additionally, this new funding will trigger the conversion of an earlier Simple Agreement for Future Equity (SAFE) investment at a 20% discount, resulting in a conversion price of $4.7114 per share.

Sun Pharma explained that $10 million from this fresh investment, combined with $7.5 million from the second SAFE tranche, will be infused by or before May 31, 2025. The remaining $15 million is expected to be invested by or before November 30, 2025, or on another mutually agreed date. The company also noted that both drugs developed by Pharmazz, Tyvalzi (Sovateltide) and Lyfaquin (Centhaquine), have already been approved in India and are marketed through partner networks.

Currently, Sun Pharma holds exclusive licensing and distribution rights for Sovateltide in select emerging markets. Following this recent investment, Sun Pharma will gain the option to negotiate licensing rights for Sovateltide in certain developed countries as well, expanding its potential global reach.

Pharmazz Inc specializes in the development of two main drug candidates: Sovateltide, aimed at treating acute cerebral ischemic stroke, and Centhaquine, intended for managing hypovolemic shock. Both drugs have received approval from the US Food and Drug Administration (FDA) to conduct Phase-3 Investigational New Drug (IND) trials, marking a significant milestone for the company.

Sovateltide has notably secured a Special Protocol Assessment (SPA) from the FDA, which provides a clearly defined regulatory pathway, streamlining the clinical trial process and increasing the potential for successful approval. The company is planning to initiate global Phase-3 trials to seek regulatory approvals in the US and other international markets, signaling its ambitions for worldwide expansion.

Financially, Pharmazz reported consolidated revenues of $3 million in the fiscal year 2024, a substantial increase from $0.9 million in both fiscal years 2023 and 2022. This revenue growth reflects the company’s progress in advancing its drug candidates toward commercialization.

Pharmazz’s strategy focuses on advancing these two key drug candidates through late-stage clinical trials and leveraging Sun Pharma’s global infrastructure for manufacturing, licensing, and marketing. The collaboration with Sun Pharma positions Pharmazz to accelerate development timelines and expand market access across multiple geographies, particularly in emerging and developed markets.

In summary, Sun Pharmaceutical’s $25 million investment in Pharmazz marks a strategic move to bolster its presence in the biopharmaceutical space with promising drug candidates targeting stroke and shock treatment. The partnership not only increases Sun Pharma’s equity stake but also enhances licensing opportunities and the global development pathway for Pharmazz’s innovative therapies. The upcoming Phase-3 trials and regulatory support like the FDA’s SPA are critical steps toward bringing these drugs to market, with strong growth potential reflected in the company’s rising revenues.