December 11, 2012 10:48
Pharmstandard in talks to buy drug maker AVVA Rus - paper
MOSCOW. Dec 11 (Interfax) - Pharmstandard, one of Russia's leading pharmaceutical companies, is in talks to buy drug maker AVVA Rus, which owns a factory in Kirov, Kommersant reported on Tuesday, citing a partner of the drug maker.
"Pharmstandard expects to close the deal to acquire AVVA Rus very soon," he said.
Drug distributor Protek, which is in litigation with AVVA Rus over product deliveries, is also aware of the upcoming deal. "We have been approached by Pharmstandard's lawyers, who said that soon they will be handling AVVA's affairs," a source at Protek said.
Pharmstandard's head of corporate communications, Ilya Krylov said negotiations are being held with AVVA "on the subject of cooperation in the area of marketing and sales of a number of drugs." There talks are not about acquiring the company, he said.
A manager at AVVA Rus confirmed the existence of "certain negotiations of company management with Pharmstandard," but declined to provide details.
AVVA Rus owns the Sti-Med-Sorb factory in Kirov. The company is wholly owned by Switzerland's AVVA Pharmaceuticals AG. AVVA Rus closed 2011 with net profit of 287.9 million rubles on revenue of 1.9 billion rubles.
The company's main product is Lactofiltrum, which is used to treat dysbacteriosis and accounts for about 50% of AVVA Rus' sales. Its two other leading products are Filtrum (used to treat food poisoning, enteric infections, alcohol intoxication) and Mikrazim (a digestive enzyme product that eases digestion), which generate respectively 15% and 12% of sales.
The head of research and consulting at Pharmexpert, Nikolai Bespalov puts the value of AVVA Rus' brand portfolio at $40 million-$50 million. Including the company's production facilities, deal could be worth $60 million-$80 million.
Pharmstandard announced earlier that it would spend $100 million on M&A deals this year. The company has already spent $60 million on a 50.1% stake in Bigpearl Trading Ltd, the beneficiary of I.I. Mechnikov Biomed, and about $20 million for 100% of drug maker Lekko. Pharmstandard financial director Yelena Arkhangelskaya said in October that the total amount of investment in acquisitions would not exceed $80 million before the end of this year.
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