Sun Ophthalmics Looks to Build a Brand-New Business in the US

Sun Pharma, the fifth largest pharma company in the US, targeted ophthalmology as one of the first planks in its new branded pharma business. Hear ophthalmology veteran Jerry St. Peter explain how Sun Ophthalmics hopes to build a new team in ophthalmology.

Ten Top Topics in this OIS Podcast:

1. What are the origins of Sun Ophthalmics?
2. What is SPARK?
3. What was the rationale behind focusing Sun Ophthalmics on the US?
4. Is Sun Pharma looking for branded products in other specialties?
5. What area in Ophthalmology will Sun be exploring?
6. Would you acquire medical devices?
7. Any chance Sun Ophthalmics will add a consumer line?
8. What markets might you be in in five to 10 years?
9. What is the relationship with the SPARK incubator?
10. Who is part of the management team?

Podcast Guest

Podcast Transcript
Tom Salemi: Well, hey, OIS Podcast listeners, welcome back to the show. This is your host, Tom Salemi. We are here. It is OIS@ASCRS week. It’s happening Thursday at the Intercontinental Hotel. Look forward to seeing you all there. If you haven’t signed up yet, haven’t registered yet, go to ois.net and get that done right away. One group that will be there is a new player to ophthalmology, Sun Ophthalmics. Sun is an arm of Sun Pharma, and last year created Sun Ophthalmics to build an ophthalmology business in the US. Sun Ophthalmics is selling its own internally developed products. It’s got a really unique arrangement with a group that we’ll hear about today. But it also acquired InSite Pharma last year, and received some good news from the FDA for one of those products. I happen to be joined on this Podcast with Jerry St. Peter, who is the Vice President and Head of the ophthalmic business at Sun Pharma, and he’s going to give us an introduction to Sun Ophthalmics, tell us what areas of ophthalmology it hopes to focus in, explain how the company will build out its portfolio, and share some of his insights from his many years in ophthalmology. So I’d like to introduce Jerry St. Peter, Vice President and head of Sun Ophthalmics.

TS: Jerry St. Peter, welcome to the Podcast.

Jerry St. Peter: Thank you very much, Tom. Really appreciate you having me on, and thank you very much to the OIS leadership team for having Sun on the Podcast this week.

TS: We’re happy to have you at the conference this week as well, and it’s always great to have a new player in ophthalmology, one that’s making acquisitions and building a business in the space. So the first question I have for you, which is a real basic one, who is Sun Pharma, and how does it fit in Sun Ophthalmics? Can you give us a little bit of history?

JS: It’s a great question, Tom. Sun Pharma happens to be a very large global company. They’re actually based out of Mumbai, India, and they’ve been around since approximately 1983, where the current managing director and CEO, Mr. Dilip Shanghvi, started the company actually back in 1983 with five products. And then over the course of many decades, through numerous acquisitions, both company and product acquisition, he’s built the company up to a very large, global pharmaceutical company in many different areas. And I would say that the bulk of the success up to this point has been around the specialty generic arena. However, they’ve been making a strategic maneuver into the branded space, and currently sitting here today, the company does about 4 and a half billion in revenue globally, and is about a 30 billion market cap organization. And one of the major future drivers of the company is going to be entering into this branded space, and that’s where one of the key components is going to be Sun Ophthalmics and the new subsidiary of Sun Pharma, Sun Ophthalmics is making its way into the space. And we’re very excited about joining this dynamic therapeutic category.

TS: Excellent. And was the first move the acquisition last September, the acquisition of InSite Vision, was that sort of the – is the foundation for Sun Ophthalmics?

JS: Well, actually, that was one of the pillars of its future opportunity and our desires to be successful in the space. But actually, many years ago, and as some looked to move into the ophthalmic space, one of the drivers was actually its research and development platform that the company has been undergoing. And one of our key areas that they are entering the space is not only through acquisitions like InSite Vision, but also organically. They have a very large R&D capability and group. In fact, one of its sister organizations, called Sparc Pharmaceutical Advanced Research Center, SPARC, actually has over 2000 scientists on staff. And they basically serve as an incubator to the business, and one of the early programs for them to enter the ophthalmic space was around their BAK preservative-free latanoprost in a multi-dose bottle, which is actually still at the FDA right now and awaiting final approval. And that was actually one of the key reasons why they decided to enter the ophthalmic space, and then obviously looking to build brick by brick. When we joined and started building Sun Ophthalmics, the leadership team that’s on board, we identified InSite Vision as an ideal opportunity based upon late stage assets. And they were looking for strategic opportunities. And so I would say that the InSite Vision acquisition was one of the key pillars, but definitely not the genesis for the company to enter into the ophthalmic space.

TS: I see. So Sun Ophthalmic, will that focus only in the US? Or will that be a global ophthalmology company?

JS: It’s a good question. Sun does have other opportunities and other businesses within ophthalmics in certain parts like in India. However, the major focus for the ophthalmic business will start in the United States. We could always have aspirations and plans to move elsewhere, but I would say that our energy, our focus and our commitment right now is let’s get it going in the United States, let’s make some maneuvers here, and then we’ll decide what to do as we make our way into the US market.

TS: What was the rationale behind focusing on the US? If you look at some of the charts that we’ve presented at past OIS’s, you see the numbers in Asia going sky high. Europe is I think flat or going down. The US is still strong, but why the US first?

JS: Well, first and foremost, there’s not a more attractive market to be in than the United States. And when you look at ophthalmics in general, and you really look at today’s population, they’re living longer. And when you look at disease state categories, ophthalmic diseases tend to really affect the population later in life. So when you take the compounding rate of people living longer, the ophthalmic diseases are growing at a very strong rate, it was the perfect market to get into. And then secondarily, if you look at the landscape, Tom, as you probably know better than anybody, over the past 5 to 6 years there’s been a dynamic shift in the landscape of pharmaceuticals within the ophthalmic businesses. Right now, you’re basically down to just a few players. You turn the clock back 6 years ago, you had companies like Inspire Pharmaceuticals doing very well, a success story. You had ISTA, a success story doing very well. You had smaller companies like Aton, Seron, even Bausch and Lomb was sold to Valeant. But all those companies were purchased and acquired, and then now today you’re looking at just a few in the pharmaceutical area. Not taking away from retina, but if you look in the non-retina companies, you have basically Valeant-Bausch and Lomb as one, you got Alcon, you have Allergan, and there’s really not many more left. Therefore, it makes it a really an attractive space. It’s a space you can be opportunistic. And let’s face it, the physicians really want to see additional players within this area. And we hope to fill that void and participate in this very large, growing market.

TS: So, Sun Pharma is getting into branded pharmaceuticals. Is ophthalmology the only space that it’ll be looking at?

JS: Well, Tom, as Sun moves into the branded space, into the branded world, and as you know, Sun Pharma has been very successful in the specialty generic area, but they’ve also been tremendously successful within the dermatology branded space. But as we sit here today, not only are we entering into ophthalmics, which we’re talking about today, but the company is also moving into the branded space of oncology, neurology, and also further strengthening its dermatology focus. So it really gives the company a really strong diversification of their positioning within the branded category, and really building on the success that they’ve achieved over the many years.

TS: Will each of those spaces have their own sort of Sun Ophthalmic equivalent?

JS: It’s a very good question. So yes, we’re building business units within these spaces, and that’s what makes it really exciting. So not only are we doing it in ophthalmics, but my colleagues in the company in other businesses are doing the same thing. So really adds a lot of excitement to Sun Pharma as a whole family which really gives us the strength to build these subsidiaries of Sun Pharma.

TS: Hi, everyone. Just wanted to give you a quick reminder. Go to ois.net to sign up for the Eye on Innovation Newsletter. It’s a weekly newsletter that’ll come right to your inbox. It’ll deliver unique, insightful reporting from our OIS editorial team, as well as this very special podcast and many like it, and videos from our OIS events and other events that we’re covering in ophthalmology. Now back to this conversation with Jerry St. Peter.

TS: If we were to fast forward five years or so, what do you think your product pipeline will look like? You got some good news last week, or earlier this month, actually. I think the FDA approved BromSite, and you can talk about it, about what the approval is for and how will it fit into things. But going forward, what areas do you think Sun Ophthalmics will be looking at?

JS: Well, it’s a very good question. And I would say the key word that comes to mind really quick is opportunistic. We’re building the business, so we do have the opportunity to license in opportunities from SPARC, from Pharmaceutical Advanced Research Center, which is an incredible incubator of products. We not only want to be organically in our growth, but we also want to look at M&A like we did with InSite Vision, and also licensing opportunities for products. So when you look over the next, let’s say, 5 years as you asked the question, we do have a great chance to be opportunistic. We’re really not pigeonholed into one area. So if you look at what we’re currently doing, we do have the glaucoma product currently with the FDA, as I mentioned, the BAK preservative-free latanoprost. Trade name is Xelpros. And then we also have a product with BromSite, which just got approved on April 8 from the FDA, which was approved for the treatment of postoperative inflammation and the prevention of ocular pain in patients undergoing cataract surgery, which was the first non-steroidal anti-inflammatory drug to actually get the prevention of pain in its label. So we’re really not set on one specific disease state. We want to participate in glaucoma, which is great for chronic medication. You look at the surgical area like BromSite for cataract surgery. So really both in the anterior segment, but then also looking many years down the road, we do have another opportunity that we’re partnered on with Intrexon for gene therapy for the posterior segment. You know, Intrexon is one of the leading companies in gene therapy, and we do have a partnership and a collaboration with them. So when you fast forward or microwave many years forward, we also have an opportunity within the posterior segment. So we’re not set on one direction, but we are set on being focused on pharmaceuticals, and as opportunities arise, we want to be in a position to participate.

TS: The name Sun Pharma sort of suggests you’re going to be focusing on pharmaceuticals. Do you think that that’s the case? Or might you look for opportunities in devices or other spaces as well?

JS: It’s a good question, Tom. I think on the outset and what our strategy and what our goal is, we want to focus in on pharmaceuticals. We want to succeed in that area. We want to put all our resources in that area. However, if something does come our way that we did want to diversify into other areas within the business of ophthalmic, we would obviously entertain it. But to truly be great in one specific area, this is where we want to focus on right now.

TS: And how about consumer space? It’s an area where it’s under a lot of pressure. There might be some opportunities to buy things there, but is that a core interest of yours?

JS: Again, I think it fits in with what we’re doing. Obviously with ophthalmics and therapeutics, there’s a pretty large segment that is OTC. When you look at the dry eye space, artificial tears or vitamins for dry eye or back of the eye, you know, we could always be opportunistic, but I would say right now what we have in front of us on the prescription and within pharmaceuticals is where we want to put our energy. And especially with BromSite approved, we have to get ready for launch, and then pending with the FDA right now is Xelpros, the BAK preservative-free latanoprost. But again, it always goes back to we’ll be opportunistic.

TS: And I’ll ask another crystal ball question. I asked sort of what products you might have in five years. What markets might you be in 5 or 10 years? Will this be an international company that started basically in the US?

JS: Well, again, Sun Pharma is a global company.

TS: Right, yeah. But the ophthalmics.

JS: The subsidiary of Sun Ophthalmics will start in the US and we have a number of products that are currently in late stage and early stage development, both with SPARC, but also with InSite Vision. You know, InSite Vision, if you look at that company, they’ve produced three products that are approved by the FDA. They had AzaSite, which is topical azithromycin, which was very successful, doing close to 100 million. They have Besivance, which is currently with B&L, which has been a very successful fluoroquinolone, and then now they have BromSite. So that’s a pretty impressive track record for an R&D company up in the Bay Area of InSite Vision. And in addition to BromSite that was just approved, we also have a late stage product with DexaSite, which is topical dexamethasone, which the company is currently in late stage development. And then behind that they have other products like AzaSite Plus, which is azithromycin and dexamethasone and other compounds that have come over with the transaction that occurred last fall. So we’re very excited about what InSite can produce, along with could potentially come out of SPARC. And then again, if opportunities arrive in the marketplace for in-licensing or other business development type deals, we’d be very open.

TS: And just a question about SPARC. You’ve mentioned that a few times. So how does that work? This is a sort of independent institute, where research is being done, and if you see something attractive, you have the option to license it from SPARC?

JS: Yeah, great question. So SPARC, as I mentioned, is the Sun Pharmaceutical Advanced Research Center. However, it is a separately, publicly listed company out of India. And so if opportunities that come out of SPARC are available, then we have the opportunity as a business to license in, just like we did with Xelpros. Because Xelpros was licensed in to Sun Pharma from SPARC, and the same would occur if other opportunities in the ophthalmic space came out. So it is a separate, publicly listed company in India.

TS: Great. And final question: let’s just talk about the management team. You’re no stranger to ophthalmology. What’s your history, and who were you working with to help build Sun Ophthalmics?

JS: So Tom, I’ve been in the ophthalmic arena for over 25 years, most recently led the ophthalmic business for Inspire. Then when that sold to Merck a few years back, I joined an international company, NicOx. I was there for 3 years before the business was acquired by Valeant and then had the extreme opportunity and privilege to come over to Sun Pharma to build this new ophthalmic business. And joining me on this crusade, I brought with us three key leaders, Jason Menzo, who is head of our commercial business, sales and marketing, been in the industry for a number of years, recognized as one of the best marketeers in the business. Also brought over Dr. Mark Jasek who is the head of medical and scientific affairs, brilliant scientist, very fortunate to have him on board. And then finally, one of the key to business is Jason Werner, who heads up our strategy and commercial development work, very focused in our business development, looking at deals, looking at opportunities and working across the business. So that’s really the core leadership team that’s building Sun Ophthalmics. And we’re very excited about being part of the Sun family, and we have the resources and the backing, and I think it’s pretty exciting to see a large company that is building from scratch, entering this dynamic space of eye care.

TS: OIS is coming up. Who are you looking to meet with? What level of business or what type of professional are you hoping to connect with at the conference?

JS: Well, good question, Tom. And we started this opportunity with Sun Ophthalmics and the Sun Pharma family probably about 11 months ago. And we have been looking at every type of opportunity within the pharmaceutical arena, from early stage to late stage. And Jason Werner’s been leading that charge, and we’ve been meeting with a lot of different advisors and companies and really learning all the different dynamic technologies. So I would say that our number one priority is late stage technology and assets that are in development. And then we’re also open to earlier stage opportunities, but definitely as we build the business, as you can probably agree, anything late stage would be priority. But we enjoy talking to partners and companies and learning. And again, we want to be opportunistic.

TS: Excellent. Well, I’m sure you’ll have plenty of opportunities to meet those folks on Thursday. Thanks for taking the time today to introduce us to Sun Ophthalmics, and that’s for taking part in OIS. Look forward to seeing you there in Thursday.

JS: Thank you very much, Tom. Look forward to seeing you in New Orleans and thank you for the time today.

TS: Jerry St. Peter of Sun Ophthalmics, we’re very happy to have you as part of OIS. I look forward to meeting you on Thursday at OIS@ASCRS at the Intercontinental Hotel in New Orleans. If any of you haven’t signed up yet, go to OIS.net. Do so right now and we will see you on Thursday in New Orleans.