Moscow, 17 February, 2009 – JSC Pharmstandard (LSE: PHST LI, RTS: PHST RU) announces its unaudited 2008 sales results. The total revenue of the Company for the year increased by 28% and achieved RUR14,565 million (or US$586[1] million).

 

Other highlights:

·         Pharmstandard has been included into the list of strategic companies by the Government of the Russian Federation;

·         Pharmstandard obtained European Union Good Manufacturing Practice (EU GMP) certifications for 6 production lines of JSC «Pharmstandard-Leksredstva»;

·         International group of well-known scientists published the results of study of the mode of action of antiviral drug Arbidol® in the leading international virology journal - Antiviral Research (2009 Feb;81(2):132 -40). The study and the fact of publication of its results in major scientific peer-review journal confirm direct antiviral effect of Arbidol® bringing it into the line with worldwide-known anti-influenza medicines such as ozeltamivir. The sales of Arbidol® grew by 18% in 2008 and achieved RUR2,731 million.

·         Pharmstandard acquired the Afobazol® trade mark from Donelle Company Limited entirely financed from the own funds. Afobazol® is the new original selective anxiolytic for anxiety disorders treatment and is patent protected until 2019. Pharmstandard’s sales of Afobazol® started in August 2008 and reached RUR218 million;

·         Mildronate® project with Grindex developed well. Mildronate® sales achieved RUR1,368 million in 2008 and grew by 41%[2];

·         Pharmstandard announces successful development of SOLMIR project. According to the agreement with Solvay Pharmaceuticals (France), Pharmstandard will produce 2 immunomodulating products - IRS19® and Imudon®.  The sales of IRS19® has been recently started and achieved RUR31 million in December 2008;

·         Pharmstandard’s gene-engineering products showed noticeable dynamic. The sales of Biosulin® grew by 36% to RUR164 million; 

·         From the beginning of the year, the Company launched 14 new products: Bloctran®, Influnorm®, Combilipen®, Complivit® ophtalmo, Complivit® Se, Complivit® Fe, Complivit® Mg,  Neipomax®, Neirocomplit®, Octolipen®, Neosmectin®, Lactazar®, Formetin® and Pentalgin® Plus. New products contribution was RUR 212 million in 2008.

 

Sales

In 2008 Pharmstandard’s sales increased by 28% to RUR14,565 million (US$586 million), which represents the increase of RUR3,193 million in comparison with RUR11,371 million in 2007. Pharmaceutical products and medical equipment sales contributed 93% and 7% of total sales respectively. Sales growth for 9 months of 2008 was 34% and 26% in 4^th quarter of 2008.

In 2008 the Company’s sales of pharmaceutical products achieved RUR13,488 million (US$542 million) and increased by 38% compared to 2007.

The sales of OTC products were RUR10,567 million (US$425 million) in 2008 and grew by 24% in comparison with prior-year period. Arbidol®, Terpincod®, Pentalgin®, Complivit®, Codelac®, Flukostat® (tablets), Amixin® and Afobazol® generated key sales growth in OTC segment.  OTC segment sales growth excluding Afobazol® and IRS 19® sales were 23% in 2008.

The Company’s revenue from prescription (Rx) products amounted to RUR2,856 million (US$115 million) and increased by 140% compared with 2007. This increase in prescription sales was attributed to successful development of Mildronate® project as well as an increase in leading brands sales, such as Phosphogliv®, Biosulin®, Cyclodol®, Pikamilon® and Renipril®. Rx segment sales growth excluding Mildronate® sales was 25%.

In 2008 the Company reported revenues of RUR1,077 million (US$43 million) from its medical equipment business, which represents a 33% decline in comparison with 2007 and generally attributable to the government tender sales in 2007.

 

 

Sales structure – FY 2008, RUR mln.

2008 (mln RUR)	2007 (mln RUR)*	Change (mln RUR)	Change, %
Pharmaceutical products	13 488	9 763	3 725	38%
OTC products	10 567	8 520	2 047	24%
Prescription products	2 856	1 188	1 668	140%
including
Mildronate	1 368	0	1 368	-
Other sales	65	55	10	19%
Medical equipment and disposables	1 077	1 609	-532	-33%
Total sales	14 565	11 371	3 193	28%

* - restated numbers, according to 2008 OTC/Rx reclassification

Sales structure – 4Q 2008, RUR mln.

	4Q 2008 (mln RUR)	4Q 2007 (mln RUR) *	Change (mln RUR)	Change, %
Pharmaceutical products	3 925	3 109	816	26%
OTC products	3 020	2 797	223	8%
Prescription products	865	296	569	193%
including
Mildronate	478	0	478	-
Other sales	40	17	23	136%
Medical equipment and disposables	280	507	-227	-45%
Total sales	4 205	3 616	589	16%

* - restated numbers, according to 2008 OTC/Rx reclassification

 

 Market

According to Pharmexpert data, Pharmstandard is one of largest pharmaceutical companies operating in Russia[3]. Pharmstandard is a leader of the biggest commercial segment of the Russian pharmaceutical segment[4]. Pharmstandard is the only one among domestic pharmaceutical companies which ranked in TOP10 market leaders.

Pharmstandard is the only pharmaceutical company at the Russian market which has 6 brands  among top-10 (in comparison with 6 brands in top-20 in 2008) best selling domestic brands in Russia such as Arbidol®, Pentalgin®, Terpincod®, Complivit®, Codelac®, Flucostat® and Amixin®.

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, February 17, 2009

09:00 New York

14:00 London

17:00 Moscow

International Call-in Number:  +44 (0)20 7162 0025
Free Phone (US Only): +1 877 491 0064

 

Conference call presentation will be available on Tuesday, 17 February 2009 on Company’s web-site:

http://www.pharmstd.ru/investors_en/investor/p2/

We recommend that participants start dialling in 5-10 minutes prior to ensure a timely start to the conference call.
Conference call participants can register in advance using the link below:

https://eventreg1.conferencing.com/webportal3/reg.html?Acc=387058&Conf=164364

 

Pharmstandard will be represented by:

Igor Krylov, CEO
Elena Arkhangelskaya, CFO
Olga Mednikova, Sales & Marketing


The conference call replay will be available through February 20, 2009.

International Replay Number: +44 (0) 20 7031 4064
Toll Free Replay Number (US only): +1 888 365 0240
Replay Access Code: 826064

Contacts:

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

***

 

Pharmstandard is the leading domestic pharmaceutical company in Russia. Pharmstandard is a leader of the biggest commercial segment of the Russian pharmaceutical segment. The Company develops, manufactures, markets and sells original and generic pharmaceutical products in various formulations, primarily in Russia. 

Pharmstandard’s product portfolio includes market-leading brands (7 brands among top-15 best selling domestic brands in Russia), such as Arbidol® (antiviral for systemic use), Pentalgin® (analgesics), Terpincod® (cough and cold), Complivit® (vitamins), Phosphogliv® (hepatic protector), Flucostat® (antifungal), Amixin® (immunomodulating). Arbidol® is the largest selling pharmaceutical product at the commercial segment of 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. 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). The sales of Afobazol®, new original selective anxiolytic for anxiety disorders treatment, have been started in August 2008, and achieved RUR218 million.

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, has one of the largest production capacities among domestic pharmaceutical companies in Russia. 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.

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[1] USD figures presented for information purposes only. 1 USD = 24.8740 RUR. 
[2]  2007 Mildronate® sales data provided by Pharmexpert, wholesale prices.
[3] Source: Pharmexpert, retail prices, 9m 2008.
[4] Source: Pharmexpert preliminary data, retail prices, 2008. Subject to change.