Russia's economy has gotten ugly in the past few years, but that has not dampened the enthusiasm of Big Pharma, which continues to like the look of one of the world's largest emerging markets. Pfizer ($PFE) is reportedly the next up with plans for a partnership to produce some of its meds there.
The Russian news agency Tass, citing sources, says Pfizer is only days away from reporting plans to form a joint venture with Russian drugmaker Polysan to produce Pfizer meds in St. Petersburg.
A spokesperson for Polysan would not comment directly but said its policy "is aimed at development of local pharmaceutical industry, including via cooperation with leading global pharma producers." A Pfizer spokesperson in the U.S. did not respond to a request for comment.
Polysan has its own portfolio of four products that it produces at plants in St. Petersburg and Belgorod, as well as a neurological drug it produces with Germany's Stada, Tass reports. Last July, it signed a deal with Bayer to make contrast media in Russia for the German company. Tass says that Polysan exports to the former CIS countries, South East Asia, Latin America and Mongolia.
Russia's economy has struggled in recent years in the face of plummeting oil prices and financial sanctions imposed by the U.S. and other Western countries in response to Russia's involvement in the civil war in the Ukraine. CNBC reported Monday that the Russian economy is expected to contract by another 1% this year, after shrinking 3.7% last year. But Kirill Dmitriev, CEO of Russia's $10 billion Russian Direct Investment Fund, told the news service that the country was using the "crisis" to restructure the economy.
Some Western drugmakers, looking for new markets, have persisted in Russia, setting up plants or partnerships to meet President Vladimir Putin's demand that for them to sell in Russia they must be prepared to transfer technology to the country, which has only a limited domestic drug industry. Last fall AstraZeneca ($AZN) CEO Pascal Soriot was in Russia to officiate at the opening of a new $224 million plant in Kaluga, which is about 90 miles outside of Moscow. Novo Nordisk ($NVO) opened an insulin plant last year, also in Kaluga. Australia's CSL in December opened operations in Moscow and is looking for partnerships to produce its blood products there.
A new partnership for Pfizer in Russia will be a small development compared to its $160 billion merger with Allergan ($AGN), which it hopes to complete in the second half of this year.