Ukraine drugmaker opens $40M plant in Kyiv

The political tensions prompted by Western reaction to Russia's support of Ukrainian separatists have created problems for some drugmakers that sell in that region but have not stopped a homegrown plant project there.

Ukraine's Biopharma has completed a $40 million manufacturing plant to make blood plasma-based products, the Kyiv Post reports. Construction started two-and-half years ago, predating the political turmoil that has since roiled the country. The plant sits on 5 hectares of land in Bila Tserkva, about 70 kilometers south of Kyiv. The facility, which the newspaper says has created 250 jobs, will make cancer drugs, as well as burn treatments and other products.

It was financed in part by funds from a Dutch development bank and from Horizon Capital, a Ukraine-based private equity fund. Another $30 million has been promised for a blood fractionalization facility there that is slated to be among the largest in Eastern Europe. The company already makes a variety of products, about 25% of which it exports.

Horizon Capital CEO Lenna Koszarny

A host of Western and Ukrainian officials attended a dedication event where Horizon Capital CEO Lenna Koszarny said investors should not be afraid to put money into the country, which she said had a very competitive manufacturing base. "At least 93% of the country is open for business and you have all the opportunities in Ukraine," Koszarny told the newspaper. "There are not tanks at Kyiv airport grinding you and nothing is in flames."

Tanks, no, but challenges, yes--particularly in Russia. Germany's Fresenius canceled plans last year 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. It said that the "changing political and regulatory circumstances in the region" made the project too difficult and that the companies would look at other ways to work together. Those challenges include three rounds of financial sanctions the West has imposed for Russia's involvement in fighting in Ukraine even as falling global oil prices have cut severely into the Russian economy. India's Dr. Reddy's indicated that the fall of the Russian ruble had undercut its revenues by 4.5% last year.

Still, there are projects progressing there. In April, Novo Nordisk ($NVO) opened a $100 million insulin plant in the Kaluga region. And Abbott Laboratories ($ABT) reached a 16.7-billion-ruble ($305 million) deal late last year to buy Russian drugmaker Veropharm, to get a "manufacturing footprint in Russia."

- read the Kyiv Post story