Sun Pharmaceutical Industries is acquiring more than 5 per cent in Pharmazz Inc, a Delaware-based company for up to $15 million in cash.

Pharmazz is a biopharmaceutical company developing its two leading drug candidates, Sovateltide for treatment of acute cerebral ischemic stroke and Centhaquine for treatment of hypovolemic shock.

Both products are approved in India and marketed through partners under the brands Tyvalzi and Lyfaquin, respectively. They are being developed for the US and other markets.

Sun Pharma, which is India’s largest drug firm by market value, said that the “strategic investment” will see it also receiving the exclusive right to license Sovateltide for marketing and distribution in certain emerging market countries.

In a regulatory filing, the company said that of the total consideration, $7.5 million (the first tranche) will be invested by August 2024, while the rest will be completed by February 2025, subject to fulfilment of certain conditions.

The investment will be convertible to equity at 20 per cent discount to pre-money valuation of next qualified fund raise by Pharmazz, subject to pre-money valuation cap of $130 million. This is expected to result in more than a 5 per cent holding in Pharmazz.

The Phase III trials for both of Pharmazz products are approved by the US Food and Drug Administration. Sun Pharma disclosed that Pharmazz plans to initiate Phase-3 clinical trials soon to support approval in the US market.

Pharmazz, which was founded in October 2010, posted a consolidated revenue of $3 million in 2023-24 against
$0.9 million a year ago.

Shares of Sun Pharma on Wednesday ended at ₹1,741.50, a gain of 0.10 per cent on the BSE.