Sun Pharma moves on Russia with deal for control of JSC Biosintez

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India's Sun Pharma has announced a deal to buy control of company in Russia where President Vladimir Putin has said foreign drugmakers need to invest in local manufacturing.

India’s Sun Pharma is joining the growing number of companies snagging a portfolio and local manufacturing in Russia with a deal worth $60 million to buy control of a Russian drug producer.

India’s largest drugmaker today said it will buy an 85.1% stake in JSC Biosintez for $24 million cash and the assumption of $36 million in debt.

It said that Biosintez, which focuses on Russia’s hospital market, last year had  revenues of about $52 million. Biosintez has a plant in the Penza region. Sun pointed out that the Russian pharma market now totals about $10 billion in sales annually and growing at 7.4% rate in local currency. Sun expects to close the deal by year-end.

Sun said in a statement the deal was part of its plan to invest in “strategic emerging markets,” while showing its commitment to Russia’s 2020 plan for foreign drug manufacturers to commit to produce drugs within the country. Russian President Vladimir Putin has indicated that those that do not may face financial penalties.

“This transaction gives us access to local manufacturing capability across multiple dosage forms in Russia, enabling us to serve the Russia pharmaceutical market more effectively,” Aalok Shanghvi, Sun’s head of emerging markets, said in a statement.

The Biosintez plant manufactures active pharmaceutical ingredients and finished products across multiple dosage forms, including injectables, ampoules, tablets, ointments, creams, gels, and suppositories.

Pharma continues to target Russia despite the fact that its economy has been weakened by years of Western financial sanctions aimed at Russia’s actions in the Ukraine. Teva recently announced that it and Russian partner Nanolek had completed a sterile injectables manufacturing plant located in the Kirov region.

Pfizer last summer announced its third deal in Russia to establish local manufacturing. It and Russia’s NovaMedica are building a manufacturing plant in the Kaluga region which they say will be producing drugs by 2020. Pfizer also has a deal for NPO Petrovax Pharm to produce Pfizer blockbuster pneumonia vaccine Prevnar 13 at a plant in the Moscow area, and it and POLYSAN Scientific and Technological Pharmaceutical will produce Pfizer drugs in Saint Petersburg.