Moscow, 21 July, 2009 – JSC Pharmstandard (LSE: PHST LI, RTS: PHST RU) announces its unaudited 1H2009 sales results. The total revenue of the Company for the first six months of 2009 amounted to RUR10,062, an increase of 62% over 1H2008.

Highlights:

·         Pharmstandard won the government tender under 7 nosologies programme (part of FRP) for oncology diseases treatment preparations. Pharmstandard acts as a distributor of Velcade® (bortezomib), original prescription product of Janssen-Cilag, and supplied Velcade® for the total amount of RUR2,505 mln;

·         Pharmstandard signs an agreement with Pharmapark on marketing and exclusive sales of Altevir® (gepatology). Starting from April 2009, sales of Altevir® reached RUR14 mln;

·         The efficacy of Arbidol® for prevention and treatment of “swine influenza” (А / H1N1/ «California 04/2009» strain) has been proven by major Russian virology scientific centres;

·         In June 2009, Pharmstandard-Ufavita receives a visit from Deputy Minister of Industry and Trade Denis Mansurov. Mr.Mansurov examines major production lines for Complivit®, Biosulin® and Rastan® manufacturing;

·         Pharmstandard has become a full member of the International Pharmaceutical Excipients Council (IPEC) Europe.

·         Pharmstandard and ZAO “Apteki 36.6” signed an agreement on direct collaboration. Pharmstandard delivers its products directly to Pharmacy Chain 36.6.

·         For the purpose of concentration of assets and strengthening of manageability, Pharmstandard plans to acquire its subsidiaries OJSC “Pharmstandard-Octybr” and CJSC “Masterlek”. OJSC Pharmstandard-Oktybr and CJSC Masterlek have no operating activity. The EGM dedicated for approval of reorganization scheduled for 2 September 2009.

Sales

Pharmstandard’s sales for the six months of 2009 increased by 62% to RUR10,062 million, which represents the increase of RUR3,863 million in comparison with RUR6,199 million reported in first half of 2008. Pharmaceutical products and medical equipment sales contributed 97% and 3% of total sales respectively.

The Company’s sales of pharmaceutical productsachieved RUR9,789 million for the first six months of 2009 and increased by 73% compared to prior-year period.

The sales of OTC products were RUR5,732 million in the first half of 2009 and grew by 33% in comparison with prior-year period. Arbidol®, Pentalgin®, Codelac®, Complivit®, Amixin® and Afobazol® generated key sales growth in OTC segment.  OTC segment organic growth excluding Afobazol®, IRS 19® and Imudon® was 24% in first half of 2009.

The Company’s revenuefrom prescription (Rx) products amounted to RUR4,015 million and increased by 203% compared with the same period of 2008. The prescription products sales were driven by an increase in leading brands sales, such as Phosphogliv®, Biosulin®, Combilipen® (launched in 2008), Cyclodol®, Pikamilon® and Azitrox®. Rx segment organic growth excluding Velcade® and Mildronate® sales was 52%.

By Company’s view, the consumption of pharmaceutical products in Russia moved to old-fashioned and traditional drugs, because of the changes in the disposable income of population in Russia. Pharmstandard’s sales of pharmaceutical products were driven not only by top-line products but also by non-branded generics (bulk products). OTC non-braned genericssales grew by 51% to RUR896 million, Rx non-braned generics sales grew by 64% to RUR174 million in the first 6 months of 2009.

The Company’s revenue from its medical equipment business totaled RUR273 mln for the first six months of 2009, which represents a 48% decline in comparison with the same period of 2008. Nevertheless, sales in 2Q2009 grew by 54% in comparison with 1Q2009.

Pharmstandard launched 4 new products in 1H2009. New products contribution was RUR9 million for 1H2009.

Sales structure – 1H 2009, RUR mln.

Conference Call
Pharmstandard is pleased to invite the investment community to a sales results conference call with the management of the company followed by a Q&A session.

Tuesday, July 21, 2009

09:00 New York

14:00 London

17:00 Moscow

To join the conference please register on-line in advance using the link below:
https://eventreg1.conferencing.com/webportal3/reg.html?Acc=916302&Conf=167425

or dial:

International Call-in Number:  +44 (0)20 7162 0025

US Toll Number : +1 334 323 6201

*We recommend that participants start dialling in 5-10 minutes prior to ensure a timely start to the conference call.
Conference call presentation will be available on Tuesday, 21 July 2009 on Company’s web-site:
http://www.pharmstd.ru/investors_en/investor/p2/

Pharmstandard will be represented by:

Igor Krylov, CEO

Elena Arkhangelskaya, CFO

Anton Golubok, IR

The conference call replay will be available through July 26, 2009.
International Replay Number: +44 (0)20 7031 4064
US Toll Replay Number: +1 954 334 0342
Replay Access Code: 841046

Contacts:

JSC Pharmstandard
Anton Golubok
Tel: +7 495 970 0030 ext 2029
E-mail: ir@pharmstd.ru
www.pharmstd.ru

***

Pharmstandard is the leading Russian pharmaceutical company. According to Pharmexpert Marketing Research Centre, it holds the top position in the domestic pharmaceutical market retail segment and the second position among Russian pharmaceutical companies overall. Pharmstandard is the only Russian company among the top ten Russian pharmaceutical market operators.

Pharmstandard portfolio includes over 200 products used in the treatment of diabetes, growth hormone deficiency, cardiovascular diseases, gastroenterological and neurological disorders, infectious diseases, cancer, etc. Over 90 products offered by Pharmstandard are included in the List of Vital Pharmaceutical Products.

Pharmstandard products are well known to Russian consumers. Among our market-leading brands are Arbidol ®, Complivit®, Pentalgin®, Flucostat®, Codelac®, Phosphogliv®, Amiksin® and Afobazol®. Arbidol® is the leading brand on the Russian pharmaceutical market. Its antiviral action has been studied in international research centers. Pentalgin® has been granted “BRAND #1 IN RUSSIA” award for 2008 in analgesics category. Afobazol® - new original selective anxiolytic for anxiety disorders treatment.

Pharmstandard have agreements with Grindex, Latvia on exclusive distribution and promotion of Mildronate® (cardio-vascular) and with Solvay Pharmaceuticals, France on production of IRS19® and Imudon® (immunomodulating).

In 2004–2009, we developed and introduced around 40 new pharmaceutical products. Our business priorities lie in the development of new product lines comprising genetically engineered medicines, vitamin and mineral complexes, cold relief preparations and medicines used in the treatment of cardiovascular, gastroenterological, neurological disorders and endocrinopathies. Currently, the Company is working on the development of new high-tech formulations in close cooperation with the leading Russian research centres.

Pharmstandard operates four pharmaceutical manufacturing facilities in Kursk, Ufa, Tomsk and Nizhny Novgorod and, with a production capacity of 1.3 billion packs per year. Six production lines of JSC «Pharmstandard-Leksredstva» meet GMP requirements. JSC «Pharmstandard-Leksredstva» is the first Russian pharmaceutical plant included in EudraGMP database. All plants meet Russian legislative requirements.

In addition to its pharmaceutical business, the Company also develops, manufactures, markets and sells medical equipment, such as sterilizing and distilling machines, and disposable medical products.

The Company has invested approximately RUR 3 billion in capital investments in its manufacturing facilities since 2004. Pharmstandard placed its shares on Russian Trading System (RTS) and GDRs on London Stock Exchange (LSE) during IPO in May 4, 2007. The current GDR to ordinary share ratio is 1:4. Augment Investments Limited controls 54.2% of share capital. Free float represents 45.8% of share capital (LSE – 27.5%, RTS – 18.3%).

www.pharmstd.ru

This press release does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of JSC Pharmstandard (the “Company”) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this press release, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.