Zydus Lifesciences Limited, through its joint venture with Sunshine Healthcare, has signed an agreement with the Board of Investment (BOI) of Sri Lanka to establish a pharmaceutical manufacturing facility. The project involves a phased investment of over $20 million in the BOI zone in Horana, Sri Lanka.

The joint venture, named Zydus Sunshine Lifesciences (Pvt) Ltd, was formed following an announcement on June 26, 2026. The agreement was executed on October 13, 2026. The new facility aims to strengthen medicine supply chain resilience and support the availability of essential medicines in the local market.

Project Scope and Timeline

The initiative represents a strategic expansion of Zydus' international presence. The facility will be developed on a site spanning nearly four acres. Commercial operations are expected to commence in 2028, subject to project timelines and relevant regulatory approvals.

In its first phase, the plant will focus on manufacturing oral solid dosage forms specifically for the Sri Lankan market. This move aligns with the company's commitment to expanding access to quality medicines through local manufacturing capabilities.

Key Deal Parameters

Strategic Implications

The partnership leverages the combined strengths of Zydus and Sunshine Holdings PLC to penetrate the Sri Lankan healthcare sector. By establishing a local manufacturing base, the venture addresses logistical challenges associated with imported medicines. The phased investment approach allows for scalable growth aligned with market demand and regulatory milestones.

This development marks a significant step for Zydus in diversifying its geographic footprint beyond established markets. The focus on oral solid dosage forms suggests an initial strategy targeting high-volume, essential therapeutic categories.

Zydus Lifesciences Limited subsidiary Zydus Therapeutics presented new post hoc analysis of its Phase 3 EPICS-III trial for investigational drug saroglitazar at the American College of Gastroenterology (ACG) 2026 Annual Meeting. The data highlighted a greater biochemical response in US patients compared to non-US subgroups in primary biliary cholangitis (PBC).

The presentation, delivered by Raj Vuppalanchi, MD, Global Principal Investigator for the study, focused on geographic consistency of treatment effects. The analysis compared 28 US patients treated with saroglitazar against 14 placebo-treated patients, and 69 non-US patients (from Argentina, Iceland, and Turkey) against 37 placebo-treated patients.

Biochemical Response Rates

The exploratory analysis revealed composite biochemical response rates were significantly higher with saroglitazar than placebo in both regions. In the US subgroup, the response rate was 60.7% for saroglitazar versus 0% for placebo. In the non-US subgroup, rates stood at 55.1% versus 13.5%.

A larger unstratified treatment difference was observed in the US subgroup (Δ 60.7%) compared to the non-US subgroup (Δ 41.6%). Alkaline phosphatase (ALP) normalization rates at Week 52 showed minimal variation between regions, with differences of 7.7% in the US and 9.6% in non-US patients.

What the Numbers Show

The data indicates a pronounced efficacy signal in the US cohort, where the treatment difference exceeded the non-US group by approximately 19 percentage points. While ALP normalization rates were comparable across geographies, the change from baseline in ALP levels was numerically greater in the US subgroup (Δ -166.2 U/L) relative to the non-US subgroup (Δ -104.7 U/L). This suggests that while the threshold for normalization was met at similar rates, the magnitude of biochemical improvement was more substantial in the US population.

Regulatory Status and Outlook

Saroglitazar is a novel Peroxisome Proliferator-Activated Receptor (PPAR) α/γ agonist currently under investigation for PBC. It has received Orphan Drug Designation, Fast Track Designation, and Priority Review from the U.S. Food and Drug Administration (FDA). The drug is not yet approved by the FDA.

Zydus Therapeutics plans to launch saroglitazar in the United States by March 2027 if approved. The EPICS-III trial was a multicenter, randomized, double-blind, placebo-controlled study involving 148 patients randomized in a 2:1 ratio. Saroglitazar was generally well tolerated, with adverse events balanced between treatment and placebo groups.