It apparently was not enough that the owner of a Singapore company that makes the active pharmaceutical ingredients (APIs) for a couple of Pharmstandard's key OTC products is a member of its board. Russia's largest drugmaker said today it will pay him nearly $600 million for his company to secure a long-term supply of the ingredients.
Pharmstandard said the stock and cash deal for Singapore-based Bever Pharmaceutical Pte must be approved in a board meeting set for Saturday. Bever is controlled by Bristley Enterprises, which in turn is owned by Dr. Alexander Shuster, Pharmstandard's nonexecutive board member. The plan calls for Shuster to receive $542 million worth of stock and $48 million in cash. With completion of the deal, Shuster will become Pharmstandard's second largest shareholder with a share of nearly 19%.
Pharmstandard said its strategic rationale for the buyout "includes securing a long-term fixed-cost supply of critical active pharmaceutical ingredients for two flagship OTC brands," Arbidol and Aphobazolum. It said it expects owning the API maker to significantly increase its profitability.
Bever will be folded into Pharmstandard's OTC unit, which it has said it is planning to spin off into a separate company. A June report put the value of Pharmstandard's OTC business at $2.5 billion, according to Reuters, and Bloomberg reports that it is second in market share, only behind the 8.2% share held by Novartis ($NVS). Pharmstandard's stock price plummeted after it disclosed its plans in July without saying who controlled Bever or its thinking behind the deal.
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