Russian pharma market on verge of further consolidation in 2014
Print
21 January 2014
The Pharma Letter
The Russian pharmaceutical market is on the verge of new deals and acquisitions in 2014, after a record 2013, when 10 large M&A deals were closed, analysts at the Russian Ministry of Healthcare believe.
Among the largest deals, which were signed in 2013, are the acquisition of Singaporean Bever Pharmaceutical (which has rights for the production of the drugs arbidol and afobazol, which are in the list of the most demanded drugs in the Russian market) by Pharmstandard (PHST RU), Russia’s leading pharmaceutical producer, for $590 million (The Pharma Letter August 14, 2013). Pharmstandard also acquired Petrovax Pharm (TPL May 7, 2013).
There was also the purchase of a 52% stake in Veropharm (another of Russia’s leading pharmaceutical producer) by Gardenhills, which is owned by Russian tycoon Roman Avdeev, who is also the owner of Moscow Credit Bank.
The increased investors’ activity in 2013 was quite understandable, as after the economic crisis, investors were afraid to buy new assets, as the market was overheated, and associated with big risks, according to Sergei Shuljak, chief executive of DSM Group, one of Russia’s leading analytic agencies in the field of pharmaceutics.
He has also added that the crisis resulted in the under-pricing of the real value of pharmaceutical assets in Russia, as investors expect further decline of the market.
According to Nikolai Demidov, head of IMS Health Russia and CIS, if in 2011-2012 the major buyers of pharmaceutical assets were largely industry players, last year saw an influx of non-core investors.
According to his predictions, 2014 will be characterized by an increase in the number of purchases of intellectual property rights for brands. There is also a possibility that the number of transactions will increase due to further localization of production by foreign companies.
In the meantime, according to analysts of the Russian Ministry of Healthcare, at present the market is mainly growing due to the increase in the prices of packaging, which is primarily due to the price rises for drugs themselves, and a reduction of the share of low-priced products.
There was also the purchase of a 52% stake in Veropharm (another of Russia’s leading pharmaceutical producer) by Gardenhills, which is owned by Russian tycoon Roman Avdeev, who is also the owner of Moscow Credit Bank.
The increased investors’ activity in 2013 was quite understandable, as after the economic crisis, investors were afraid to buy new assets, as the market was overheated, and associated with big risks, according to Sergei Shuljak, chief executive of DSM Group, one of Russia’s leading analytic agencies in the field of pharmaceutics.
He has also added that the crisis resulted in the under-pricing of the real value of pharmaceutical assets in Russia, as investors expect further decline of the market.
According to Nikolai Demidov, head of IMS Health Russia and CIS, if in 2011-2012 the major buyers of pharmaceutical assets were largely industry players, last year saw an influx of non-core investors.
According to his predictions, 2014 will be characterized by an increase in the number of purchases of intellectual property rights for brands. There is also a possibility that the number of transactions will increase due to further localization of production by foreign companies.
In the meantime, according to analysts of the Russian Ministry of Healthcare, at present the market is mainly growing due to the increase in the prices of packaging, which is primarily due to the price rises for drugs themselves, and a reduction of the share of low-priced products.
All Portfolio
MEDIA CENTER
-
The RMI group has completed sertain projects
The RMI Group has exited from the capital of portfolio companies:
Marinus Pharmaceuticals, Inc.,
Syndax Pharmaceuticals, Inc.,
Atea Pharmaceuticals, Inc.