India's Lupin gets Russian production site in deal for Biocom

A Biocom facility--Courtesy of Biocom

While recent problems in Russia's economy have thrown some deals off course, Western drugmakers in the last several years have built or bought production capacity in Russia to tap what has been seen as an important emerging market. India's Lupin jumped into that market, picking up a company that will give it a production toehold there.

Lupin said last week that it was buying Russia's ZAO Biocom, which has a manufacturing facility that does contract manufacturing as well as making its own generic meds. Biocom was formed in 1991 and makes cardiovascular and central nervous system meds as well as antimicrobials. It says its plant achieved manufacturer status from the World Health Organization (WHO) in 2013. The facility has annual capacity to produce 540 million tablets and 200 million capsules and does final packaging on 24 million units.

Lupin didn't provide insight into terms of the deal but did say that Bicom had sales last year of about RUB 861.2 million ($15.3 million). It has 118 employees.

A lot of bigger drugmakers have set up local production in the country in the wake of threats by President Vladimir Putin that the country would penalize drugmakers who simply imported their products. Novo Nordisk ($NVO) in April opened a $100 million manufacturing plant in Kaluga that it had started in 2010 before a tumbling oil market and sanctions from the West over Russia's involvement in Ukraine put squeeze on its economy. Novartis ($NVS) is completing a $150 million plant near St. Petersburg and Abbott Laboratories ($ABT) agreed late last year to pay 16.7 billion rubles ($305 million) to Russian billionaire Roman Avdeev to get drugmaker Veropharm so it would have local production.

But Germany's Fresenius had to cancel its plans to create a partnership with Russia's Binnopharm, which would have given it access to two manufacturing facilities that make IV drugs and infusion solutions as well as APIs. The deal was scuttled after Fresenius said that changing market conditions in Russia would make it impossible to close.

- here's the release

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