vladimir krasnikov_april 22 2015_cphi tokyo

Increasing Market Opportunities in the Emerging Russia as its’ Powerhouse

Vladimir Krasnikov, Director GeneralRUSSIAN 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: 2007Company Overview

Supporting foreign innovators or licensors entering the Russianpharmaceutical, biotech, food supplement and medical devices marketsby means of marketing their licensing opportunities among decision-makers in Russia and the ex-USSR territory by bringing buyers andsellers 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 saferenvironment by

bridging businessculture 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 pharmaceuticalmarket 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 2014YTD/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 2014YTD/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 procurementsales in Russia, 2010-2015

2010 2011 2012 2013 2014YTD/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 2382 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 HamariChemicals 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 111508 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 Imidafenacinin 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 expectancyTotal: 66.25 yearsFor men: 63.5 years (80 years in Japan)*For women: 69 years (87 years in Japan)*

Healthcare infrastructure5,000 state hospitals + 12,000 polyclinicsLess than 300 private clinic

Healthcare regulator Ministry of Healthcare of the Russian Federation

Minister of Healthcare Professor Veronika Skvortsova

Healthcare in Russia, 2013

Vladimir Krasnikov | CPhI -2015 Tokyo, April 22, 2015Sources: 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 PharmaceuticalMarket 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%

Parapharmaceuticals16%

State procurerement7%

Hospital18%


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 entVolum e, b i l l ion rubles

GrowthVolum e, m i l l ion uni ts

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 system12,70% 14,30%

C: Cardio 12,30% 10,30%

N: Neurology 11,80% 18,50%

M: Drugs for the treatment of diseases of the

musculoskeletal system7,70% 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

organs2,60% 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

DISTRIBUTORVALUE

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

6Alliance 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

10Imperia 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 chainsVolume, 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

clinical2. 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 scope4. 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).Vladimir Krasnikov | CPhI -2015 Tokyo, April 22, 2015

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 Russia1. 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 pharmaceutical market members

• 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

Business development strategy

1. BD strategy for existingRussian pharmaceutical market members

2. BD strategy for beginnersof Russian pharmaceutical market members


BD strategy for existing Russian pharmaceutical market members

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 injectablesand 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 pharmaceutical market members

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 groundbreakedceremony 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 NarimanovDistrict 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 LLC27, Presnensky Val, office 814

Moscow 123557, Russia

tel.: +7 495 640 5275

fax: +7 495 640 5276

email: [email protected]

site: www.regulatoryaffairs.ru

Creating a safer environment by bridging business culture gaps


http://www.regulatoryaffairs.ru/