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Pharmstandard Bever Takeover: Today Singapore, Tomorrow the World?



7/16/2013 9:23:05 AM

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LONDON, UK (GlobalData), 15 July 2013 - Pharmstandard’s recent announcement of its intended acquisition of Singapore-based Bever Pharmaceutical may be the first move in plans to globalize the Russian company’s European success, states an analyst with research and consulting firm GlobalData.

Adefemi Adenuga, GlobalData’s Analyst covering Healthcare Industry Dynamics, believes that, should it go through, the takeover will likely lead to greater revenue growth for Pharmstandard and establish the Russian firm as an international force.

“Pharmstandard’s acquisition of Bever Pharmaceutical would enable it to grow its business operations outside Europe – the only region where it currently has a significant presence. Consequently, Pharmstandard would be aiming to utilize its operations in the high-growth Singapore pharmaceuticals market as a beachhead for the rest of the Asia region,” says the analyst.

The Russian firm, ranked third among 30 leading generic manufacturers in GlobalData’s PharmaLeaders: Generic Manufacturers Benchmark Report, boasted a 21% increase in revenue from $1.4 billion in 2011 to $1.7 billion in 2012. However, states Adenuga, Pharmstandard’s acquisition of Bever Pharmaceutical may be financially complicated by the company’s plans to spin off its OTC operations.

“Currently, Pharmstandard is minimally leveraged, with long-term loans of only RUB47.8m ($1.6m) at the end of 2012. Therefore, the company’s decision to spin off its OTC business segment, rather than sell, and acquire Bever Pharmaceutical, potentially places some strain on its working capital, unless it raises funds through debt. However, there are indications that the company could still opt to sell its OTC business segment, instead of spinning it off.”

Recently, Pharmstandard has been involved in other acquisitions targeted at both domestic and international growth. In November 2012, the company acquired Lekko CJSC, a Russian innovation company focused on the research, development, production, and marketing of high-efficacy drugs.

Adenuga concludes: “The Bever pharmaceutical acquisition would require a significant investment by the company, however, the allure of international expansion and the potential increase in Pharmstandard’s revenues make it a difficult opportunity for the company to ignore.”

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