Novartis ($NVS) to plow $500M into Russia

Novartis ($NVS) has big plans for the "R" in BRIC. Those fast-growing emerging markets (Brazil, Russia, India and China) have been attracting huge investments from Big Pharma these days, but Novartis' pledge to invest $500 million in Russian manufacturing, R&D and public health is among the biggest.

First, the Swiss drugmaker has inked a deal with the city of St. Petersburg to build a manufacturing plant there. Given Prime Minister Vladimir Putin's recent warning to foreign drugmakers--that they'd face restrictions if they didn't manufacture locally--the planned facility is a key component of Novartis' in-country strategy. "Novartis is making a strategic investment in Russia for long term growth," said CEO Joe Jimenez (photo) in a statement. "The ongoing partnership with Russia enables us to expand our commercial presence in a key emerging market."

When it comes online in 2011, the new plant will make 1.5 billion units of branded and generic products a year, the company says. In the meantime, Novartis will expand its R&D activities in Russia and collaborate with the government on public health initiatives. The company didn't give a dollar figure for R&D investment, but said it will work with both academia and private businesses and pledged to double its spending on clinical trials there. Both in- and out-licensing could be part of the picture, the company said.

Other drugmakers working on Russia include Novo Nordisk, which plans a $100 million insulin plant there, and Nycomed, which is working on a $93 million API-making facility. Of course, a who's who in the industry has set up partnerships in the Russian market, including GlaxoSmithKline ($GSK), which recently inked a deal with Russian vaccines maker JSC Binnopharm.

- get the release from Novartis
- read the Wall Street Journal story
- see the news from Reuters
- check out the Bloomberg coverage

ALSO: Barclays analysts raised their Novartis price target on the back of strong uptake data for the Swiss drugmaker's multiple sclerosis pill Gilenya. Report