Macquarie has reaffirmed its ‘outperform' rating on Sun Pharmaceutical Industries Ltd. and raised its target price to Rs 2,135 from Rs 2,100, following the company's successful bid to acquire Checkpoint Therapeutics. Despite the offer being significantly higher than rival bids, Macquarie sees the acquisition as value accretive and strategically sound.
According to the brokerage, Sun Pharma's bid was nearly twice that of another serious contender. The pharma firm offered a total of $616 million, comprising $355 million upfront, a $60 million contingent value rights payment, and a 2.5% royalty to Fortress.
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This offer also included mid-single-digit royalties on net sales and was substantially above the competing $200 million bid from a large Asian pharma company.
The acquisition strengthens Sun Pharma's position in dermatology-oncology, according to Macquarie. The lead asset, Unloxcyt, is seen as a strong strategic fit, filling a critical gap in the pharmaceutical company's derm-onco portfolio and supporting its focus on the US Medicare channel. The asset offers promising potential in combination with PD-1 inhibitors and through other future indications. Macquarie estimates a base case net present value of over $500 million for Unloxcyt, with a bull case NPV exceeding $1.5 billion.
The acquisition is also viewed positively due to Unloxcyt's mechanism of action, offering high-affinity, fully human monoclonal antibody benefits and the potential for broader therapeutic use. The investment is considered accretive in the longer term, especially with the anticipated expansion of Sun's specialty product pipeline.
As a result, Macquarie has increased its financial year 2025/2026/2027 earnings forecasts by 1–3%, factoring in the contribution from Unloxcyt and a slightly lower tax rate.
According to the brokerage, key upcoming catalysts include finalisation of the Checkpoint acquisition, fourth quarter results, and the launch of key specialty products such as Unloxcyt and Ilumya. Macquarie remains constructive on Sun Pharma's transition towards specialty-led growth, backed by a well-diversified pipeline and strong execution.
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