Pfizer Partners with NovaMedica to Build Manufacturing Unit in Russia

Print 20 July 2016
Jerry Boling / Market Digest

Pfizer Inc. (NYSE: PFE) is currently in the process of developing several manufacturing units in a number of geographical territories all over the world. Just recently, the pharmaceutical giant inked its third major deal in the in the past couple of years. This huge deal involves a partnership with NovaMedica of Russia to establish a manufacturing facility in the country.

The two companies have mutually signed the deal, wherein Pfizer Inc. will be responsible for the new manufacturing unit located in the Kaluga region. Aside from this, the drug manufacturer will transfer the licenses of up to 30 molecules, which amounted to $60 million, in Pfizer’s drug portfolio to be developed under the said agreement. The two companies have not yet given any information regarding the financial terms of the deal.

This move by the pharmaceutical giant can be considered as a wise move given the fact that Western companies are currently facing sluggish and stagnant growth because of the various sanctions and political tightness between Russia, Brussels, and Washington. In addition to this, the United States and the European Union have also employed sanctions when it comes to trade. According to the drug maker, the mentioned deal serves as a ray of hope for the multinational corporations in the West that Russia has already opened its doors to new investments.

Pfizer Inc aims to begin the construction of the manufacturing facility this 2016, while the production in the unit is anticipated to begin by the year 2020. This recent deal is still in process, as the two drug companies negotiate to come to a final agreement.

On the part of Russia’s NovaMedica, the company offers approximately $85 million in investment, together with 100 of its current employees. The corporation also stated that the Pfizer investment is anticipated to be a part of the $200 million, which the investors will add in the next half a decade.

The therapeutic markets in Russia are nothing new for Pfizer, as the drug manufacturer has already covered a number of therapeutic markets since the year 1992. Meanwhile, NovaMedica is also not a new player to the markets in the United States, as the company was founded back in 2012 by the leading Domain Associates, which is an American healthcare venture capital firm, as well as Russian investment fund Rusnano.

“The collaboration between Pfizer and NovaMedica is a good example of working together simultaneously to localize a diverse portfolio of products that are essential to patients, and in high demand by healthcare professionals,” stated the Pfizer regional president of Europe Petra Danielsohn-Weil.

The corporation created this facility in line with the plan of the Russian President Vladimir Putin, under which foreign pharmaceutical companies are required to build manufacturing facilities in order to have operations in the country. Before this, drug companies including Novo Nordisk and AstraZeneca have already begun their businesses with production plants in Russia.

During the previous year, Pfizer moved its manufacturing technology to NPO Petrovax Pharm to create the pneumonia vaccine Prevenar 13 in a Moscow facility. Moreover, it has concluded the deal for the manufacture of Xeljanz, Lipitor, as well as Zyvox with POLYSAN Scientific & Technological Pharmaceutical. The pharmaceutical titan aims to start manufacturing the vaccine by the year 2018 at the latest.

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