Sun Pharmaceuticals Industries, India’s largest drugmaker informed the exchanges on Wednesday that it has entered into an agreement with Pharmazz Inc., based out of Delaware, US, to acquire a more than 5% stake in the company for an aggregate investment of up to $15 million in cash.

Sun Pharma has called this a strategic investment in a Pharma company. The company will also receive the exclusive rights to license ‘Sovateltide’ for marketing and distribution in certain Emerging Market countries.

The first tranche of $7.5 million will be invested this month, while the remaining $7.5 million shall be invested by February 2025, subject to fulfilment of certain conditions.

This investment will be convertible to equity at a 20% discount to the pre-money valuation of the next qualified fund raise by Pharmazz, subject to pre-money valuation cap of $130 million.

Pharmazz is an Illnois-based biopharmaceutical company used in developing its two leading drug candidates – Sovateltide, which is used to treat acute cerebral ischemic stroke and Centhaquine, which is used to treat hypovolemic shock.

Both of these products have approval in India and are marketed through partners under brands Tyvalzi and Lyfaquin.

For financial year 2024, Pharmazz had an annual turnover of $3 million.

Shares of Sun Pharma are currently trading little changed at ₹1,738.25.