Vladimir krasnikov april 22 2015 c_ph_i tokyo

Increasing Market Opportunities in the
Emerging Russia as its’ Powerhouse
Vladimir Krasnikov, Director General
RUSSIAN PHARMALICENSING GROUP
Creating a safer environment by bridging business culture gaps
Tokyo, April 22, 2015

Welcome
CPhI-Japan 2015, the comprehensive
pharmaceutical event bringing together leaders
and key decision makers from Asian and the
global pharmaceutical industry in Tokyo
Vladimir Krasnikov | CPhI -2015 Tokyo, April 22, 2015

Session 1
15:00 – 15:25 Introduction
• About Russian Pharmalicensing Group (RPhG)
• Japan-USSR/Russia: The history of the business
relationship
• Japan-Russia: "Sanctions? Business is above all“
• Japanese drugs (FDF) and nutritional
supplements (FDF) market in Russia, 2004-2014.
API of Japanese origin in the Russian market

About RPhG(1)
Company Information
• Business Name: Russian Pharmalicesensing Group LLC (RPhG)
• HQ: Moscow
• Markets: Russia, ex-USSR countries, West Africa
• Established: 2007
Company Overview
Supporting foreign innovators or licensors entering the Russian
pharmaceutical, biotech, food supplement and medical devices markets
by means of marketing their licensing opportunities among decision-
makers in Russia and the ex-USSR territory by bringing buyers and
sellers together.
We can help foreign company to register their products and identify a
rightpartner/marketer in Russia.

About RPhG(2)
General Business Activities
• BD&L (Business development and licensing)
• Regulatory affairs incl. clinical trials
• M&A advisory services

Creating a safer
environment by
bridging business
culture gaps

Russian foreign trade partners
Rating Country
Volume, billion
USD
Jan-Nov 2014
Increased in turnover as
compared with Jan-Nov
2013
1 China 81.1 101.5%
2 Netherlands 67.9 97.7%
3 Germany 64.2 94.8%
4 Italy 45.0 92.8%
5 Turkey 28.5% 97.4%
6 Japan 28.3% 93.8%
7 USA 27.0% 107.5%
8 S.Korea 25.5% 111.2%
9 Poland 21.6% 86.0%
10 UK 18.2% 82.1%
Source: Federal Customs Service of Russia

Japan-USSR: The history of the
business relationship
• In 1957, the total amount of trade turnover
between the USSR and Japan was only 21.6
million $
• In 1963 it increased to 320 million $
15-fold increase within 6 years!

Japan-Russia: "Sanctions? Business is
above all“

Size and dynamics of retail pharmaceutical
market of leading countries in 2012, bln $
0 50 100 150 200 250
USA
Japan
China
Germany
France
Brazil
Russia
Canada
Italy
UK
+21%
+10%
+16%
Source: DSM Group, Russia

Big Pharma Boys

Astellas and Takeda wholesales in
Russia, 2004-2014
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
ASTELLAS PHARMA* 43 422 177 57 059 655 105 524 150 122 643 401 159 274 988 163 230 240 205 426 608 254 968 304 297 523 412 308 895 525 285 536 284
NYCOMED/TAKEDA 102 484 138 163 042 314 200 924 659 265 501 778 356 132 586 369 719 218 452 110 924 549 864 996 571 776 578 604 894 752 588 583 078
0
100 000 000
200 000 000
300 000 000
400 000 000
500 000 000
600 000 000
700 000 000
USD
Source: IMS Healthcare, Russia

Astellas and Takeda retail sales in
Russia, 2010-2015
2010 2011 2012 2013 2014
YTD/2015/
MTH02
NYCOMED/TAKEDA 354 370 646 428 083 753 449 423 475 496 460 201 482 283 239 52 063 078
ASTELLAS PHARMA* 170 427 342 208 045 303 240 817 677 256 207 525 236 166 947 26 978 152
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
USD

Astellas and Takeda hospital sales in
Russia, 2010-2015
2010 2011 2012 2013 2014
YTD/2015/
MTH02
NYCOMED/TAKEDA 64,853,604 85,563,045 114,901,352 101,618,785 101,419,930 5,570,525
ASTELLAS PHARMA* 5,883,038 16,629,644 25,941,478 31,405,955 33,510,926 1,885,170
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
USD

Astellas and Takeda state procurement
sales in Russia, 2010-2015
2010 2011 2012 2013 2014
YTD/2015/
MTH02
NYCOMED/TAKEDA 32,886,674 36,218,197 7,451,751 6,815,766 4,879,909 764,412
ASTELLAS PHARMA* 29,116,228 30,293,357 30,764,257 21,282,045 15,858,411 4,532,742
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
USD

Japanese origin drugs (FDF)
manufacturers market in Russia, USD
701,564 953,630
2,738,238
2,358,399
4,665,755
2,904,785
4,307,748
5,812,633
7,843,290
6,447,368
4,081,189
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Japanese drugs manufacturers in the
Russian market
Manufacturers ATC3 product categories
1. A05B
2. G02
3. L01A
4. L01B
5. L01C
6. L01D
7. L01W
8. N03A
9. S01X
1. Biken
2. Daiichi Pharm
3. Japan Biopro. Inds.
4. Kyowa
5. Melsmon Pharm
6. Nippon Kayako
7. Sandzu Pharma
8. Sankyo
9. Taiho Pharma

Japanese API manufacturers in the
Russian market
1. Yuki Kase Kogyo Ko.Ltd
2. Shin-Yo CO., LTD
3. Biochem Corporation
4. SMIC SMO Ko.Ltd
5. Kaneka Corporation
6. Ajinomoto Ko.Ink
7. Ionezava Hamari
Chemicals ltd. Japan
8. Dayita Corporation
Japanese 20 APIs have
been registered in Russia

Japanese nutritional supplement (FDF)
market in Russia, USD
103,849 119,771 179,504
360,111
508,507
2,423,054
1,058,4741,048,112
266,478
2,251,887
2,449,616
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Japanese nutritional supplements
manufacturers in the Russian market
1. Arkray
2. B2UP Co Ltd
3. Cross Co Ltd
4. Daiwa Pharm
5. Orihido Co
6. Osato Res. Inst.
7. Paladium Corp
8. Pharmaspray
9. Shimizu Chemical
10. Yanako Co

Kyorin Pharmaceutical and R-Pharm
Reach Agreement in Russia
• In October 2014, Kyorin Pharmaceutical and
R-Pharm Reach Agreement in Russia and
neighboring nations for Activities Related to
the Development and Marketing of
Imidafenacin
• Kyorin Pharmaceutical grants R-Pharm
exclusive rights to activities related to the
development and marketing of Imidafenacin
in Russia and neighboring nations.

Session 2
15:25 – 15:35 Healthcare in Russia. Segments of
the Russian pharmaceutical market
• Healthcare in Russia at a glance
• Russian pharma industry outlook 2014
• Russian pharma market at a glance
• Commercial (retail), Parapharmaceuticals,
Hospital and State Procurement

RUSSIAN HEALTHCARE AT A GLANCE

Indicator Data
Share of expenses on healthcare in
Russian GDP
3.7%
Forecast of healthcare financing in
2018
4.5% GDP
Expenses for healthcare in absolute
figures in Russia
2.4 trillion rubles (equal to 53.5 billion euros)
Healthcare expenses per capita 22,000 rubles (equal to 490 euros)
Life expectancy
Total: 66.25 years
For men: 63.5 years (80 years in Japan)*
For women: 69 years (87 years in Japan)*
Healthcare infrastructure
5,000 state hospitals + 12,000 polyclinics
Less than 300 private clinic
Healthcare regulator Ministry of Healthcare of the Russian
Federation
Minister of Healthcare Professor Veronika Skvortsova
Healthcare in Russia, 2013
Sources: Russian MoH;
*WHO Statistics 2014

Russian Pharma Industry Outlook 2014
The industry, the number of new enterprises, their
percentage of the total number of new enterprises.
• Food industry and Agriculture: 100 (28%)
• Construction industry: 85 (23.8%)
• Mechanical engineering and metallurgy: 47 (13.2%)
• Petroleum and petrochemical industry: 26 (7.3%)
• Pharmaceutical industry: 18 (5%)
• Automotive: 28 (7.8%)
• Mining: 8 (2.2%)
• Light industry: 15 (4.2%)
• Radio Engineering and Electrical: 30 (8.4%)
Source: President's Council on economic modernization
and innovative development of Russia.

Size and Dynamics of Retail Pharmaceutical
Market of Leading Countries in 2012, bln $
0 50 100 150 200 250
USA
Japan
China
Germany
France
Brazil
Russia
Canada
Italy
UK
+21%
+10%
+16%

Russian Pharma Market at a Glance
• Russia contributes only 0.2% of the world’s
supply of pharmaceuticals
• Pharma market is dominated by imported drugs
(up to 75%) in value (USD) and 45% in volume
(units)
• Up to 70% of the pharmaceutical products are
financed out-of-pocket by patients
• The existing state reimbursement system covers
around 20% of medication costs and guarantees
free drug provision only to certain vulnerable
groups of patients

Ratio of the sales volume of Rx and
OTC in 2014
Value-wise (RUR) Volume-wise (units)
50%
50%
Rx OTC
29%
71%
Rx OTC

Segments in the Russian Pharma
Market
Commercial (retail)
59%
Parapharmaceuticals
16%
State procurerement
7%
Hospital
18%

The Russian Pharma Market by
Segments in 2013-2014
2013y 2014y Growth
TOTAL, USD 32 782 351$ 25 969 818$ -20,8%
TOTAL, RUBLE 1 045 757 000 ₽ 1 142 672 000 ₽ 9,3%
q1-4 2013 q1-4 2014 q1-4 2013 q1-4 2014
Commercial (retail) 608 841 674 710 10,80% 4 422 4 223 -4,50%
Parapharmaceuticals 169 404 182 956 8,00%
State procurement 84 829 84 056 -0,90% 75 70 -7,60%
Hospital 182 682 200 951 10,00% 957 967 1,00%
TOTAL 1 045 757 1 142 672 9,30% 5 455 5 259 -3,60%
Segm ent
Volum e, billion rubles
Growth
Volum e, m illion units
Growth

Russian Pharma Market by ATC, 2014
A: Alimentary tract and metabolism 19,30% 17,80%
R: Drugs for the treatment of diseases of the
respiratory system
12,70% 14,30%
C: Cardio 12,30% 10,30%
N: Neurology 11,80% 18,50%
M: Drugs for the treatment of diseases of the
musculoskeletal system
7,70% 6,70%
D: Derma 6,10% 10,40%
L: Antineoplastic and immunomodulating agents 4,20% 1,80%
B: Blood agents 3,40% 2,90%
[~] Drugs w/o ATC 3,20% 5,00%
S: Drugs for the treatment of diseases of the sense
organs
2,60% 2,40%
V: Others 0,60% 0,50%
P: Antiparasitic products, insecticides and repellents 0,30% 0,50%
АТС Groups (1st level)
MS (value), %
MS (volume),
units, %
J: Anti-infectives for systemic use 7,70% 6,50%
G: Drugs for the treatment of diseases of urogenital
bodies and sex hormones
H: Hormonal drugs
systemic use (excluding sex hormones)
7,40% 1,90%
0,60% 0,60%

Top 10 distributors in the Russian
pharmaceutical market (FDFs)
RATING
2013y
DISTRIBUTOR
VALUE
MS, %
VALUE
INCREASE,
%
RUR,
BLN €, BLN
1 Katren 137,1 3,05 16,2 22,6
2 Protek 133,2 2,96 15,7 8,4
3 ROSTA 93,8 2,08 11,1 14,3
4 SIA 83,7 1,86 9,9 -6,9
5 R-Pharm 62,6 1,4 7,4 26,9
6
Alliance
Healthcare 61,6 1,37 7,3 5,3
7 Pulse 49,5 1,1 5,8 38,8
8 Oriola 40,5 0,9 4,8 8,2
9 BSS 21,2 0,47 2,5 35,2
10
Imperia
Pharm 14,1 0,31 1,7 -13,9
Top 10 distributors account
for more than 80% of sales
with a trend of consolidation

Peculiarities of the top Russian
pharmaceutical distributors
• Business diversification:
1. Almost all national distributors have a subordinate
network of pharmacies (Protek, Katren, Rosta, Oriola,
etc.) within the control structure
2. Developing actively is its own production (Protek with
Sotex, R-Pharm, SIA, Biotec etc.)

Rating of pharmacy chains at the end
of 2014
Rating Pharmacy chains
Volume, billion
rubles
Share in commercial
segment,
Increased in
turnover as
compared with
Number of sales
outlets
4 qt., 2014 4 qt., 2013
1 A.V.E. * (incl. 36,6) 8.2 3.2% 13% 709
2 Rigla 8.1 3.2% 29% 1 202
3 Implosia 6.2 2.4% 18% 1 350
4 А5 5.6 2.2% 23% 1 005
5 Doctor Stoletov (incl. Ozerki) 5.4 2.1% 16% 342
6 Raduga (incl. Pervaya Pomoshch) 3.9 1.5% -3% 866
7 Pharmaimpex 3.4 1.3% 7% 534
8 Pharmland 3.3 1.3% 66% 485
9 Planeta Zdorovo 3.1 1.2% 37% 635
10 Samson-Pharma 2.4 1.0% 53% 41
11 Vita 2.4 1.0% 11% 457
12 Klassika 2.3 0.9% 2% 178
13 Pharmacor 1.9 0.8% 16% 380
14 Ladushka 1.8 0.7% 21% 225
15 Melodiya Zdorovya 1.7 0.7% 19% 520
TOP-15 59.7 23.4% 19.4% 8 929

Session 3
15:35 – 16:00 Regulatory Affairs
• The categories of medicinal products subject
to the state registration
• Drug registration procedure
• State registration (listing in the Register) of
APIs in Russia
• Medical device registration in Russia

The categories of medicinal products are
subject to the state registration
1. Original medicinal products
2. Generic medicinal products
3. New combinations of the previously
registered medicinal products
4. New pharmaceutical forms and dosages of
the previously registered medicinal products

Drug registration procedure in Russia
Principles of medicinal product expertise
and ethical expertise
• The process consists of 2 stages:
1. Procedures for obtaining authorization to conduct a
clinical
2. Procedures for examination of the quality, effectiveness

Stages of registration of pharmaceutical
products and medicines in Russia
1. The study of the documentation
2. Consultations with experts of the executive
bodies; signing of the contracts
3. Pre-registration documentation scope
4. Pharmaceutical expertise
5. Clinical trials (individually)
6. Registration certificate issuing

Preclinical studies of generics in Russia
• Definition of general toxic properties (acute
and sub acute (sub chronic) toxicity
• Local irritant effects when compared with the
registered analogue

Preclinical studies for the original drugs
and biosimilars
• Overall assessment of general toxic properties
• Specific types of toxicity (mutagenicity,
reproductive toxicity, carcinogenic effects,
allergenic effects, immunotoxin effects)
• Pharmacological security
• Specific pharmacological activity
• Pharmacokinetics

Article 14 of the Federal Law No.61 “On
circulation of medical products”
Article 14. Principles of medicinal product expertise and ethical expertise
1. Expertise of medicinal products and ethical expertise are based on the principles of legality,
respect for the rights and liberties of an individual and citizen, rights of legal persons,
independence of an expert, objectivity, comprehensiveness and completeness of trials conducted
with the use of modern achievements in science and technology, responsibility of a federal state
budgetary institution for conducting expertise of medicinal products and of experts for the
expertise conduct and quality.
2. Expertise of medicinal products for medical use is conducted in stages:
1) at the first stage – expertise of documents for obtaining authorization to conduct clinical trials
of a medicinal product, except for:
а) medicinal products which have been authorized for medical use in the Russian Federation for
more than twenty years and in regard to which it is impossible to conduct bioequivalence trial;
б) medicinal products for medical use, in regard to which international multicenter clinical trials
are conducted, a part of which is carried out in the Russian Federation;

Clinical trials in FL No.61
BEFORE Law enactment
Registration scheme in general
conformed to international
approach
AFTER Law enactment
Unique registration scheme is
created which has no parallel:
• Mandatory local trial
conduct
• Results of MICT
(Multicenter International
Clinical Trials) are not
recognized unless Russian
centers participated therein

45
State registration (listing in the
Register) of APIs in Russia

Formulations and APIs registration
in Russia. Issues and handling.
1. A registration of API is actually is listing in the State Registry
2. Listing of API is relatevely a long term process and it has kept
becoming significantly more complicated and austere since 2010
as a result of the following:
– Russia joining WTO;
– Strengthening of regulatory authorities' role as a watchdog of
Russian people's safety;
– Extension of conditions for clinical trials to new drug applications
and as the consequence to quality of API;
– Russian Government's active involvement in pharma business
regulation, including pricing of life saving drugs, tender business,
support of Russian manufacturers (Pharma 2020), focusing on
tech transfer instead of finished drugs imports.

API listing in the Registry.
Key Aspects (1).
1. A registration dossier is submitted to the Russian
Health Ministry.
2. Within 5 to 10 days, the Health Ministry reviews a
dossier, and in case no questions arised, it issues a
request for a quality test.
3. Upon receipt of a quality test request, within 15 days,
samples of the API, a reference standard sample, and
other standard samples (if used for raw materials
control) should be submitted to the Federal Agency for
Medical Substances Testing and Certification.

API listing in Register.
Key Aspects (2).
4. API quality testing lasts for 60 working days.
5. Results of the testing are forwarded to the Health
Ministry, and, within 10 working days, the Health Ministry
reviews the results and forwards an unquiry featuring the
results of testing to the company-manufacturer. (The
inquiry should be replied within 7 days).
6. Upon receipt of a response to the inquiry, should no
issues are raised, regulation documentation and a draft
decision for filing the API in the State Registry is
prepared (registration papers for a substance are not
handed out at this time).

API listing peculiarities (1).
1. According to law, API registration process lasts for 110
working days, but currenly timelines are not complied
with, and an applicant should expect a 8-12 month
period, provided a quality test yields a positive outcome.
2. The official state duty for API registration is 100,000
Roubles (equal to 2,800$ or 2,100€), no more official
payments on top of that are due.
3. As far as a patent is concerned, an API patent as such is
not submitted with a registration dossier, but there must
be a document certifying the manufacturing of this
substance issued by a manufacturer (a GMP certificate
and a copy of manufacturer's license).

API listing peculiarities (2).
4. It is known that in the EU and the USA API manufacturers do not
register pharmaceutical substances separately from the finished
product.
It is different in Russia: first, the API manufacturer register a
pharmaceutical substance, while FDF registration should be done by
FDF manufacturer. Thereby, no registration-no business as Russian
manufacturers are not interested in non registered product discussion.
Technically, for registartion our company needs only the section 3.1.S
- 3.7.S, i.e. only the part that concerns the substance, to register the
pharmaceutical substance.
We also require the annexes concerning validation of analytical
methods if they are not pharmacopoeias.

Documents and data required for the
preparing of registration dossier for
API of foreign origin in Russia.
I. Administrative documents of the manufacturer of pharmaceutical substances.
1. Power of Attorney from the manufacturer to the applicant (required legalization).*
2. Documents confirming the registration of API, if registered outside the Russian Federation (Manufacturing
License).*
II. Documents on the production.
3. Documents conforming of compliance with the conditions of production, national or international standards
(legalization required)*.
4. A brief outline of the production process and methods of process control.
5. Description of the stages of production control.
6. Description of quality control of finished substance, specification, validation of analytical methods, validation and /
or qualification process.
7. Information about the conditions of storage and transportation of the drug.
8. Certificate in substance from the manufacturer.
9. Specification packaging materials.
*Documents must be notarized in the country of manufacture.

Medical devices registration in
Russia

Medical devices market in Russia
• Medical devices market values 4,2 bln USD in
Russia in 2013
• Top 4 medical devices county origin ranks as
1. China
2. USA
3. EU
4. Russia

Peculiarities of Medical Devices
Registration in Russia (1)
• Federal Service on Surveillance in Healthcare and
Social Development (Roszdravnadzor) follows
hazard classification of medical devices aren't
harmonized with the international norms and
standards.
• An artificial barrier initially intended to wall off
careless producers eventually create problems for
the regulation and procedural support of medical
devices registration in Russia.

List of Documents Required for Applying of
Registration of Medical Products of Foreign
Origin in Russia
1. Letter of Manufacturing Organization – 1 copy.
2. Letter of Attorney given to an authorized person by Manufacturing Organization/MAH for
carrying out registration.
3. Application for Registration, Re-registration of a Medical Product (in Russian) – 2 copies.
4. Certificate of a Medical Product with the brief information about its application and main
characteristics (in Russian) – 2 copies.
5. Photographs of a Medical Product (size not less than 130*180 mm) – 2 copies.
6. Promotional illustrative material – 2 copies.
7. Registration documents of Manufacturing Organization in the country of origin and/or in
other countries – 2 copies.
8. Registration documents of a Medical Product as a measuring device in the country of
Manufacturing Organization/MAH and/or in other countries (if available) – 2 copies.
9. Foreign documents (national or international), confirming the compliance of a Medical
Product with the requirements of national or international regulative documents and
characterizing conditions of its production. – 2 copies.
10. Application data sheet/operating instruction of Manufacturing Organization/MAH for a
Medical Product (in Russian) – 2 copies.

Requirements to Legalization Procedure of Documents
Necessary for the Solution of a Question of Registration of
Medical Products of Foreign Origin
• The documents submitted to the Federal Service on the Supervision in the public health and social
security sphere for consideration of a question of registration of a Medical Product and issue of the
corresponding certificate are to meet the requirements as follows:
1. A letter of Manufacturing Organization stating the intention to perform registration of products is to
be presented on a letterhead paper in the official language of the Manufacturing Organization with
the translation into Russian.
2. Application for Registration, Re-registration of a Medical Product is to be presented on Applicant’s
letterhead paper, according to form indicated in Annex 2, and if required to provide full and correct
information on the complete of the Medical Product to be registered. Application is to be presented
in Russian or with Russian translation.
3. A letter of Attorney granting the right to perform registration is to be arranged and certified in
accordance with established order.
4. Certificate of a Medical Product is to include brief information about its application, main
characteristics as well as information of the time of its development, launching and the countries it
is supplied to. It is to be presented in Russian or with Russian translation.
5. A photograph of a Medical Product is to represent the appearance of a product and its components.
6. Promotional illustrative material is allowed to be submitted in a foreign language.
7. Documents mentioned in clauses 7, 8, 9 of “List of Documents Required for Applying of Registration
of Medical Products of Foreign Origin in Russia” if Annex 1 are to be presented in the original or
copies certified in the established order.

www.RegulatoryAffairs.RU

Session 4
16:00 – 16:15 Entry to The Russian Pharma
Market
• BD strategy for existing Russian
pharmaceutical market members
• BD strategy for beginners of Russian
• M&A. Regional Insights

Market Access
RPhG can make assessment and test your
product against competing ones in the Russian
market
Build a winning value proposition of your
product that can be tailored to the decision-
maker in Russia

Business development
strategy
1. BD strategy for existing
Russian pharmaceutical
market members
2. BD strategy for beginners
of Russian pharmaceutical
market members

BD strategy for existing Russian
1. Building of new manufacturing facilities on the
Russian Federation territory
2. Purchase of the existing manufacturing facilities
3. Creation of cooperative management enterprise
with Russian (foreign) manufacturer including
contract manufacturing (i.e. localization)
4. Russian market launch of new medicinal
products
5. No significant changes

Localization
1. The key factor in the state strategy “Pharma
2020”
2. Localization of pharmaceutical production – a
complex process
3. Total volume of investments in the Russian
pharmaceutical industry in a variety of
localization forms has already exceeded 1.6
billion dollars, and there is more to come.

Key issue facing foreign companies
towards localization in Russia
a) Establish its own manufacture or
b) Use local sites

Construction of its own
manufacture
PROS
• Full control and management
• Quality Control
• Control over all stages of
manufacture:
– FPP manufacture
– Manufacture quality control
– Primary Packaging
– Secondary packaging
• Rapid technology transfer
• Not subject to external political and
economic factors, including sanctions
• Cost reduction; imported medicinal
products are subject to 10% tax duty
in Russia
• Tax incentives from the state
CONS
• Large investments
• Start of production requires 3 and
more years
• Lack of qualified personnel
(technicians, production
managers) and, as a
consequence, its high cost

Services of local manufacturers
PROS
• Relative project completion
progress
• Low cost of entry
• Ability to attach an
additional site
CONS
• Lack of complete control over all
stages of manufacture
• Access to appropriate technology
• Limited capacity of local
manufacturers for high-tech
product manufacture

Sotex profile
• Sotex is a leading Russian R&D
company
• High-tech production site with
the requirements GMP EU
• R&D platform with competencies
in development of injectables
and biotechnological products
• Unique line for the production of
drugs in pre-filled syringes with
automatic needle protection

Sotex Partners

BD strategy for beginners of Russian
1. Independent entry into the market
2. Purchase of the Russian company or
establishment of cooperative management
enterprise
3. Authorization of in home medicinal products
with the following out-licensing
4. Selling of authorization dossier including
contract manufacturing

M&A. Regional Insights
“The pharmaceuticals and
biotechnology sectors are
currently battling with
declining pipelines, patent
expirations and a
clampdown on healthcare
spending. As their troubles
grow, the sectors are being
forced to increasingly
engage in mergers and
acquisitions (M&A)
activity.”
Global M&A: Outlook for
Pharmaceuticals. KMPG
• Many global companies seeking to establish a foot print
here in Russia due to good economic climate and
consistent pharma market annual growth of 10%-12%
since 2003.
• National Health Project funds, Biopharma clusters and
GMP plants drive Russian’s Pharma 2020
• The level of M&A activity for the past years in Russia
has been consistent – between 8-10 deals per year
• Most of the transactions were driven by acquirer’s need
to access to pipeline and products, and with entering to
Russian market
• There are actually mid size transactions

Nycomed invested in pharma
plant in Russia
2006. Nycomed is ranked 9th
among TOP-10 pharma companies
in Russia
2009. Takeda-Nycomed announced
to invest 75 mln euro in building of
manufacturing plant in Yaroslavl,
Russia.
2010. Vladimir Putin groundbreaked
ceremony of the future plant took
place

Pharmstandard and Millhouse to take stake
in Russian Biocad in 2014
• Biocad a biosimilar developer produces
original biological products as well as generic
biotech drugs
• 130 employees of BIOCAD are involved in the
creation and study of new drugs

AstraZeneca
• In 2011, Innovative Development Agency (AIRCO)
has begun construction of its own full cycle plant
to transfer manufacture of about 30 AstraZeneca
drugs
• AstraZeneca constructs a plant in accordance
with international standards
• Total investment in the construction of the plant
will be about $ 187 million, of which the second
phase will have more than $ 100 million.

Kaluga Industrial Park “Grabtsevo” added a
new Berlin-Chemie Plant
• A Berlin-Chemie plant—Berlin Pharma—was opened
on May 19, 2014 in the industrial park “Grabtsevo”
• The total investment into the project was
approximately EUR 30 million

Abbott agreed to buy Veropharm in
2014
• Abbott acquired a Russian drug maker
Veropharm for 17 billion rubles ($ 495 million)
• Abbott also incurs the Veropharm debts in the
amount of 4.7 billion rubles ($ 136 mln)

Novo Nordisk opens new factory for
the production of insulin in Russia
• On April 10, 2015 company Novo Nordisk
opened Novo Nordisk opens a new
manufacturing facility in Russia
• Manufacturing comprises preparing an insulin
solution, filling and packing

Sanofi can build a plant in Leningrad
Oblast
• Sanofi is considering construction of the plant
in the territory of Leningrad Oblast
• The Memorandum of Understanding signed
between Sanofi Russia and the Government of
Leningrad Oblast at the XIII International
Investment Forum “Sochi-2014”.

Cadila
In 2013, Cadila Pharmaceuticals Ltd. decided to
build a pharmaceutical plant in Narimanov
District of Astrakhan Oblast

R-Pharm and Eli Lilly
R-Pharm and Eli Lilly plan to launch manufacture
of the entire insulin line from 2015 at a plant in
Kostroma (Central Russia) owned by the Russian
partner.

RPhG M&A Advisory Services
RPhG advise both domestic and international
companies to assist their goals in Russia, include:
– Evaluation of Russian prospect client by identifying
factors leading to a sale decision
– Organization and conducting M&A negotiations in
close cooperation with the client
– Coordination of the whole negotiating and selling
process between parties
– Confidential approach of potential acquirers and
vendors
– Company analysis incl. due deal

Contact
Vladimir Krasnikov, Director General
Russian Pharmalicensing Group LLC
27, Presnensky Val, office 814
Moscow 123557, Russia
tel.: +7 495 640 5275
fax: +7 495 640 5276
email: Vladimir.Krasnikov@pharmalicensing.ru
site: www.regulatoryaffairs.ru
Creating a safer environment by bridging business culture gaps

Vladimir krasnikov april 22 2015 c_ph_i tokyo

Vladimir krasnikov april 22 2015 c_ph_i tokyo

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