Financing Growth

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."

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

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."