Technology & innovation | Industry, manufacturing

AstraZeneca and UCB agree to help fund Russian pharma innovation

8 Apr '11
Oleg Kouzbit, Online News Managing Editor

Swedish-British AstraZeneca has inked a deal with the RF to fund innovative biotech projects across Russia. And Belgium’s UCB Pharma and Russia’s Binnopharm are pooling efforts in R&D and marketing with an eye to local production and extending R&D to Russian university sites. With its 10-20% annual growth rates Russia’s biotech market is becoming increasingly attractive for global pharmaceutical majors.

AstraZeneca and RVC

AstraZeneca, the Swedish-British company based in London and ranked seventh in the world by revenue last year, says it shook hands earlier this week with Russian Venture Company (RVC) on plans to provide direct financial assistance to successful innovative projects in Russia’s biotech sector. Amounts have yet to be specified as they hinge on projects AstraZeneca will find but are expected to be “considerable.”

RVC is a government-run business with a mandate to raise and channel investment capital into Russia’s innovative technology start-ups and early-stage expansion projects.

According to AstraZeneca Russia president Nenad Pavletic, the firm is also reportedly eyeing across-the-board technology transfer and wants to start bringing in its specialists to raise expertise in Russia and do joint R&D. One of the facilities for this will be the sizable research and development department AstraZeneca has promised to set up at its $150m Kaluga facility.

Kaluga on line in 2013

In 2013 the new facility is expected to start producing a full line of GMP standard medicines for a whole range of disorders from inflammation to cancer, thus joining other international pharma movers and shakers like Switzerland’s Nycomed or France’s Sanofi-Aventis that have launched or are setting up Russian production.

With more than $4bn in global R&D spending each year AstraZeneca is keen to uncover scientific biotech opportunities beyond Moscow and monetize them through large-scale partnerships with key Russian players.

In February the firm inked an agreement with the Skolkovo Foundation, a body championed by Viktor Vekselberg, a co-owner of Russia’s Renova, and Craig Barrett, ex-chairman of Intel, to facilitate fundraising and streamlining of project selection for Russia’s most widely touted ‘new Silicon Valley’ innovation hub.

RVC sees biotech as a high priority. According to CEO Igor Agamirzyan, about $50m—more than half of funds invested through the government company in 2010—went to pharma projects across the country. In early 2011 Russia officially announced a goal of increasing pharmaceutical exports over the next ten years eight times their present volume.

Investing in Russian intellectual capital

On the heels of the AstraZeneca-RVC deal, Belgium’s UCB Pharma signed an MoU with Russia’s Binnopharm on technology transfer, packaging of UCB drugs and doing extensive joint R&D.

Set up in 1928, UCB Pharma is a Brussels-based pharmaceutical known for its drugs for epilepsy and other CNS disorders like nootropil. 2010 sales were up a reported 3% y/y to about $4.2bn driven by a new line of products for rheumatoid arthritis, Crohn’s disease, epilepsy, Parkinson’s disease and restless legs syndrome.

Based in the town of Zelenograd outside Moscow, Binnopharm was launched in 2009 with an initial investment of $152m from its owner, Russia’s AFK Sistema.

Under plans, Binnopharm will start packaging and domestically marketing UCB products. By 2015, the firm will be producing a reported 7.5 million packages. After that, the Belgian firm is expected to localize production on the premises of the Russian manufacturer.

Investment rather than bricks and mortar

UCB CEO Roch Doliveux emphasized, however, that unlike some of its competitors, UCB did not have plans to build its own production facility in Russia, and will invest in domestic “intellectual capital” instead and “stimulate research rather than stimulating manufacturing.”

According to Mr. Doliveux, in addition to Binnopharm, the Belgian company is eyeing joint research with other Russian pharmas as well as universities. Working with the Zelenograd company UCB also reportedly hopes to “strengthen Russia’s participation in international clinical trials.”

UCB has yet to specify its investment, but on Tuesday it told media that its Russian sales would hopefully triple by 2020 as a result of its domestic R&D and marketing efforts. In 2010, it had sales of a reported $84m in Russia, accounting for 0.5% of the national pharma market.
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