Pharma M&A, investment in Russia leading to exports, RBC Daily says

Print 17 August 2015
EJ Lane / FeircePharmaAsia

U.S.-based Abbott Laboratories ($ABT) is among a number of companies that hope to leverage acquisitions in Russia into exports, with other players such as India's Lupin among other potential firms to look to ship wider abroad.

In December of last year, Abbott navigated political tensions between Russia and the West that scared Germany's Fresenius out of a partnership in the country and concluded a deal to buy Russia's Veropharm for 16.7 billion rubles ($305 million) via the purchase of holding company Garden Hills--which owns about 98% of Veropharm--from local billionaire Roman Avdeev.

Now, Russia-based RBC Daily says, Abbott plans to build an international business based on Veropharm with export of drugs from the company's manufacturing facilities, citing Michael Warmuth, executive vice president and head of market-recognized pharmaceuticals at Abbott.

Abbott's Michael Warmuth

Warmuth, in an interview with RBC Daily, declined to provide specifics on when exports would begin, or which medications could be involved.

However, Veropharm came with portfolio in women's health, CNS, cardiovascular and gastroenterology, as well as a new oncology offering.

An analyst however told RBC Daily that Abbott's international oncology business may be based in Russia at the Veropharm factory now being built in Vladimir Oblast. Sergey Shulyak, general director of the DSM Group, a research firm, told the publication the plant's capacity will be sufficient for a large-scale export program, and necessary certificates to supply products to Europe and the United States from this plant should be ready within a year or two.

According to the analytical firm RNC Pharma, RBC Daily said, Russia exported around 15 billion rubles worth of drugs in 2014 with Nizhpharm, owned by Germany's STADA, accounting for 11.6%.

RBC Daily also said that Sanofi ($SNY) has eyed exports to Germany in the first quarter of 2016 of insulin produced in Russia from the Sanofi-Aventis Vostok plant in Oryol Oblast, which has a GMP certificate from the European Medicines Agency.

In early April, RBC Daily said, an insulin plant was opened by Novo Nordisk ($NVO) in the Grabtsevo Industrial Park in Kaluga Oblast and Eli Lilly ($LLY) plans local production this year, though export plans are not confirmed.

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