Actavis gains foothold in Russian generics market

By Anna Lewcock

- Last updated on GMT

Related tags Pharmaceutical industry

Actavis has announced its majority purchase of Russian
pharmaceutical manufacturer, ZiO Zdorovje, in a move set to
establish the company's presence in the growing Russian generics
market.

Actavis acquired a 51 per cent controlling interest in the company in a deal worth €47m - €23m of which will be available for reinvestment into ZiO Zdorovje to produce new products and increase production and capacity.

The Russian pharmaceutical has a current annual capacity of approximately two bn capsules and tablets as well as 20 million sachets, and produces 12 generic medicines. It was also one of the first Russian manufacturers to attain ISO 9001:2000 certification.

Actavis' aim is to work closely with ZiO Zdorovje (who retain a 49 per cent stake) to capitalise on this local manufacturing presence in the growing Russian generics market. Despite Russia's 1998 economic crisis which impacted heavily on the country's pharmaceutical industry, the market is showing signs of improvement with major reimbursement reform initiated in 2005, and Actavis predicts a growth in the Russian generics industry at an annual rate of 15-17 per cent during the next five years.

Actavis already has a presence in Russia, with the country representing the company's seventh largest market and accounting for four per cent of the Group's annual sales. It is hoped that this new agreement will help facilitate the company's participation in state hospital tenders, currently ZiO Zdorovje's main business.

Actavis has been very active in its acquisitions in recent years, and as a result the group now stands among the world's largest in the generic pharmaceutical industry. In October of this year, Actavis announced that it had pulled out of the battle to acquire Croatian generic manufacturer Pliva. The decision followed a bidding war with Barr Pharmaceuticals, after Actavis announced that it was not prepared to increase their proposed bid of €2bn.

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