As the biggest equity broker in Russia, Kushaev says Troika already has the experience with multinationals in different industries
that have gone through consolidation. "Our financial services are now internationally competitive, transparent, flexible and
competent. We are both a local player with good knowledge of the Russian situation and a company that has established strong
international equity distribution. It's a win-win combination," he says. "Our research has been awarded many times by well-respected
international publications and institutional investors, and we cover 300 companies in the country, more than anybody else;
we are aware of names that fail to enter the radar screen of big international banks."
At the same time, Kushaev is aware that "as a Russian financial services company, not being affiliated with other companies
means that we have no conflict of interest. We can take a natural lead. All this makes us unique."
Any doubters, says Kushaev, can call Troika's main shareholder, chairman and chief executive officer, Ruben Vardanian - widely
recognized as one of Russia's greatest business minds - to obtain his personal guarantees.
Russian Innovation: Fact or Fiction?
About 600 Russian pharmaceutical companies lack any semblance of internationally accepted quality control mechanisms
While local contract research organizations and other pharma- focused service companies have carved out a meaningful role
for themselves, the same cannot be said for local manufacturers. Only two, Pharmstandart and Otechestvennye Lekarstva, consistently
rank among the top-20 market participants in a highly fragmented local landscape of about 600 pharmaceutical companies that
are mostly relics of the Soviet era and lack even a semblance of internationally accepted quality control mechanisms or the
capacity to innovate. Only about 10 Russian companies engage in production under European GMP standards. These companies
constitute the membership of the Association of Russian Pharmaceutical Manufacturers (ARFP). The organization was created
in 2002 under the premise that international GMP standards must be the foundation of the future.
The Big GMP Question
Titova Liliya Viktorovna, general director of the ARFP states, "Russian factories operate under less comprehensive internal
standards and the document from 1998, which was our country's first attempt to create GMP standards on a national level."
However, the Ministry of Health failed in its attempt to hand down a timeline for mandatory adoption of international GMP
standards due to its unrealistic deadline of 2005. Today it's difficult to determine whether any GMP standards exist in Russia
Titova Liliya Viktorovna
Viktorovna now has high hopes for a document awaiting Ministry of Health approval that would effectively harmonize Russian
GMP with leading European GMP requirements. Such a breakthrough would probably be linked to Russia's entry into the World
Trade Organization and would pave the way for investment - both foreign and local.
A similar harmonization of pharmacopeia would logically follow to enhance export opportunities. Exports in 2005 were worth
less than $200 million and went mostly to Russian-speaking CIS countries with no GMP or ISO requirement.
Leading the Way
As one of the largest Russian companies realizing the full chain of production through an active pharmaceutical ingredient
(API) production facility that feeds its drug plant, Oleg Mikhaylov, general director, says Pharm Sintez is in the process
of building a full complex with GMP standards. It will be ready in 2008. Moscowbased Pharm Sintez exclusively replicates and
produces drugs that have just come off patent.
In 2006 - within two years of its creation - Pharm Sintez reached the $20 million sales mark, and now the company is ambitiously
aiming for the number-one position among Russian pharmaceutical manufacturers and sales of $200 million within the next two
to three years, with the help of new exports of its first-generation generics to Western European markets.
"We were already the first Russian company in terms of volume, research possibilities and export possibilities," explains
Mikhaylov. "We aspire to continue on that road through very interesting products in the last steps of registration."