Taro Pharmaceutical Industries makes affordable drugs for cardiac, dermatological, neurological, and pediatric illnesses. It manufactures and markets generic prescription and over-the-counter (OTC) drugs, primarily in North America and Israel. It also produces private label and branded drugs. Its facilities are capable of producing topical, oral, and injectable formulations. The company also produces active pharmaceutical ingredients (APIs) for use by its own facilities and sold to other drugmakers. Its customers include wholesalers, drugstore and grocery chains, and discount retailers. India's Sun Pharmaceutical owns a controlling stake in Taro and intends to take the company private.
The US accounts for more than three-fourths of Taro's annual revenues; its two other key markets are Canada and Israel. Within those primary markets, Taro makes about 200 generic and OTC products, including oral cardiovascular and neurological prescription drugs, as well as prescription and OTC dermatological creams, ointments, and gels. It also makes a variety of pain and fever medications, nasal sprays, and eye care products for the domestic Israeli market. The company's top-selling products are desoximetasone (sold as Topicort in some markets), a topical corticosteroid for inflammation, and generic warfarin (Coumadin), a blood thinner sold in North America, the UK, Israel, and other global markets.
Taro Pharmaceutical routinely reinvests about 10% of its sales into research and development efforts for new products. It has also invested in manufacturing facility and information technology upgrades in recent years. The company's primary research and manufacturing locations are located in Israel and Canada; it ceased operations at its manufacturing and research center in Ireland in 2010.
After more than two years of haggling over a merger agreement, Sun Pharma gained a controlling 50% ownership stake in Taro (and about 65% of Taro's voting rights) in late 2010. By 2011 it had increased its ownership stake to just over 66% of common shares (and 77% voting power). Despite this control, Taro continued to struggle with Sun Pharma's plans to gain full control. However, by 2012 the company's board of directors capitulated and agreed to merge with Sun and be taken private.
Sun Pharma's relentless pursuit of Taro is part of its strategy to expand its product offerings in the US market, where it added dermatology and topical offerings through the deal, as well as a larger array of generic cardiovascular, psychiatric, and anti-inflammatory drugs.
The negotiations between the two companies were troubled by shareholder discontent from the beginning, with Templeton Asset Management (part of Franklin Resources) trying to scuttle the deal over what it saw as unfair terms for minority shareholders. (Templeton his since sold it shares to Sun Pharma.) Sun Pharma continued to seek a hostile takeover of Taro, with the two companies fighting out their differences in Israeli courts, as well as out-of-court mediation sessions, before finally coming to an agreement in 2010.
Once the deal was struck, Taro's board of directors stepped down, including chairman Barrie Levitt and other members of the founding Levitt and Moros families, which previously owned a controlling stake in Taro. Sun Pharma's chairman, Dilip Shanghvi, became chairman of Taro. – less