Germany's Stada Completes Acquisition of Russia's Nizpharm

German generic drugs producer Stada Arzneimittel AG has completed its purchase of Russian drugmaker Nizpharm, following discussions originally begun in August 2004 and concluded last month. The deal envisages the acquisition of 97.47% of the Russian company's shares, which were previously held by its management, private investors and the European Bank for Reconstruction and Development (EBRD).

Nizpharm is currently Russia's fourth-largest local drugmaker, and expects to report sales almost double its 2003 result of RUB1.42bn (US$50.62mn) this year. With its new purchase, Stada will become one of a small but growing number of foreign drug companies with a direct manufacturing presence in Russia. Nizpharm recently modernised its production facilities to comply with GMP standards, a certification that all local manufacturers were supposedly obliged to hold by 2005.

The Russian producer's portfolio includes both generics and branded products, with its main focus in the field of soft-form treatments. Its products account for 26% of the Russian suppository market and 10% of the ointment market. The company's total product portfolio, which comprises more than 110 treatments, also features 30 treatment groupings including gynaecology, dermatology and gastrointestinal products.

Foreign companies have been increasing their focus on the Russian market over the last two years, as its potential has become apparent. Although much modernisation and reform is still required, the market's considerable size and current low consumption rate indicate that substantial opportunities do exist.