Sun Pharma shares tumble 4% as firm closes in on $12-billion Organon acquisition. What’s spooking investors?

Shares of Sun Pharmaceutical Industries tumbled more than 4% to Rs 1,643.60 on Friday after The Economic Times reported that the pharma major has submitted a $12-billion binding offer for Organon & Co., entering the final stage of its most ambitious overseas acquisition bid.

The stock emerged as the top loser on the Sensex and Nifty, as concerns intensified over the size of the proposed deal despite broader market strength.

Mumbai-based Sun Pharma has completed detailed due diligence that lasted over three months and is now finalising a financing package before submission of a firm offer in the coming weeks, ET reported, adding that at least three global banks were mandated last week to back the bid, which will be the largest global M&A involving an Indian pharma major if it goes ahead.

ET on January 19 was the first to report that India’s biggest drugmaker was evaluating the acquisition of Organon, a debt-ridden US company specialising in women’s health that was spun off from MSD (Merck Sharp & Dohme) in 2021. Sun was in negotiations with JPMorgan, MUFG and Standard Chartered Bank for financing, ET reported. In January, Sun had made a non-binding offer before initiating due diligence.

“It’s been hot and cold even after January due to heightened global volatility. But in the last 10 days, Sun has yet again upped its tempo,” said an executive aware of the negotiations. “It’s a massive bet, and it only makes sense if you are playing to win at such an advanced stage.”

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Shares of Organon have fallen 19.06% in the year to date following a brief spurt in January after news of Sun’s bid became public. Organon has been on Sun Pharma’s radar for a while now, but a serious evaluation began last November when the US company decided to sell its JADA post-partum haemorrhage (PPH) treatment system to Laborie Medical for up to $465 million as it sought to pivot from women’s health devices to renew its focus on the women’s health biopharma range.

Organon’s debt, intense competition

Organon inherited $9.5 billion of debt during the MSD spinoff and has been facing intense competitive pressure from global drugmakers as well generic suppliers in all three of its broad business segments–women’s health, biosimilars and the established products range, which includes cardiovascular drugs, respiratory and non-opioid pain, bone health and dermatology drugs.

The latest data show Organon reduced debt to $8 billion in calendar 2025. In comparison, Sun has about $3.2 billion (Rs 26,000 crore) of net cash on its balance sheet. The management has said it’s willing to utilise this to fund large acquisitions. In FY26, Sun Pharma clocked sales of Rs 52,000 crore—the US and India contributed almost an equal share of 31-33%. The rest is divided between other markets and active pharmaceutical ingredients (APIs).

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Last year, Sun Pharma acquired Checkpoint Therapeutics for $355 million upfront, and the deal value reached $416 million. This gave Sun Pharma access to Unloxcyt, an anti-cancer drug. Sales from 11 of its innovative drugs grossed $1.21 billion in the US. Those include ophthalmology, hair loss, dermatology and anti-cancer drugs. Sun Pharma’s largest innovative drug in the US is Ilumya, for the treatment of plaque psoriasis, which saw sales of $681 million last year.

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