German Bayer partners with Russian drug manufacturer

Bayer HealthCare has struck a deal with a Russian drug manufacturer that will allow it to start producing products in a country that is considered one of the best bets for future growth.

German Bayer says that with its strategic partnership with Russian drug manufacturer Medsintez the two companies will "jointly manufacture and commercialize" neural drugs and pharmaceuticals for infections as well as diagnostic imaging products.

Andreas Fibig, president of Bayer HealthCare Pharmaceuticals, said in a statement, "The local production of our products will provide additional momentum to our business development in this growth market" and strengthen the company's competitive position.

Without providing details, Bayer says the companies will build new manufacturing plants as well as manufacture from existing facilities. The partnership will kick off the deal by jointly making antibiotics Avelox and Ciprobay, neural drug Nimotop and diagnostic imaging products, a Medsintez specialty.

Medsintez is headquartered in the Sverdlovsk region of Russia in what is referred to as the Urals Pharmaceutical Cluster, home to about 30 medical and pharmaceutical companies. Alexey Podkorytov, CEO of Medsintez, said the deal will also allow the companies to develop new drugs based on Russian R&D but targeted at global markets.

Lots of companies like the growth prospects in Russia, a country with a growing middle class that has a hunger for new treatments. Novartis ($NVS), for one, is building a $150 million manufacturing facility near St. Petersberg. Novartis CEO Joseph Jimenez has been blunt about at least part of the motivation for local production. He has pointed out that Russian President Vladimir Putin has warned that drugmakers that do not invest in the Russian market can expect to face restrictions on drug imports.

- here's the release