Russian pharma: from distribution to biotech

07 Sep 2007

Overview

Context

Collapse, recovery, the DLO and beyond

Trusted Judgements

High imports mean powerful distributors; small market means small growth. Watch for opportunities in applied biotech and IPOs

> Dr. Jan Dauman,

CET-InterMatrix, sector-specialist consultancy

Wrap

A modest sector with intriguing possibilities

Relevant Companies

Pharmaceutical

Name	Description
Akrihin	Not listed. Russian manufacturer of over 150 types of drugs
Alliance Unichem (LN: AUN)	Apteka Holding, a non-listed company, sold a 96 per cent stake to Alliance Unichem in February 2006 in a deal reportedly worth US$34mn.
Berlin-Chemie/ Menarini Group	Not listed. German-Italian company that imports a range of drugs.
Biotek Group	Not listed. Biotek is a major distributor and regional drugstore owner.
Gedeon Richter (HB: RICHT)	Hungary-based drug manufacturer with best-selling pharmaceuticals in Russia
GlaxoSmithKline (LN: GSK)	UK based importer of drugs to Russia
KRKA-Rus (SV: KRKG)	Slovenian manufacturer with production facilities in Moscow
Laboratories Servier	Not listed. French drug importer with best-selling pharmaceuticals in Russian market
Lek DD	De-listed. Slovenian importer of a range of drugs
Moron	Not listed. About a quarter of the size of leading Russian distributors.
NPK Katren	Not listed. Drug distributor one-third the size of sector leaders.
Otechestvennye Lekarstva	Not listed. Major Russian drug manufacturer
Pfizer (US: PFE)	American importer of drugs
Pharmacy 36.6 (RU: APTK)	Russia's largest drugstore chain
Pharmstandard (RU: PHST)	Pharmstandard, the largest Russian pharmaceuticals producer in Russia was valued, after its 5/07 IPO at $2.2 bn. Pharmstandard manufactures drugs in five facilities in Russia, and includes in its product-line Arbidol, a Tamiflu substitute. Core owners are Viktor Kharitonin, Yegor Kulkov and Millhouse Capital, the investment vehicle of Russia's richest man Roman Abramovich.
Protek	Not listed. One of Russia's biggest distributors (other being SIA International), 2006 revenues estimated at US$2.17 bn.
Rosta	Not listed. With Katren, about a third the size of biggest distributors. Sales based on commerical market and DLO.
Sanofi-Aventis (FP: SAN)	Biggest producer of Russia-consumed drugs; latter include: vaccines, cardiovascular drugs, OTC, and generics.
Shreya Life Sciences Ltd (IN: 160939Z)	About a sixth the size of the market leaders, distributor Shreya 9an arm of the above traded company) focuses on commercial and hospital sales.
SIA International	Not listed. One of two highest-valued Russian pharma distributors (the other being Protek). Value estimated at US$2bn.
STADA group (GR: SAZ)	German producer with acquired facilities (Nizhpharm, Hemopharm, MAKIZ, Skopinpharm, Biodyne) in Russia
Veropharm (RU: VRPH)	Russian drug manufacturer connected to major drugstore chain 36.6