Pfizer strikes second deal this year for drug production in Russia

Pfizer was a little behind some of its peers in establishing local manufacturing in Russia but it's on a roll now, having just announced its third deal in several years. It is hammering out an agreement with Russia’s NovaMedica for a new manufacturing plant.

Construction will begin this year on a plant in Russia’s Kaluga region with the expectation that the plant will be producing drugs by 2020. A Pfizer spokesman said the companies are still hammering out terms of the deal and are not yet disclosing how big of an investment the New York company will make in the manufacturing facility.

NovaMedica earlier had announced its intent to invest $85 million in its plant in Kaluga, which it has said will employ about 100 people. While terms with Pfizer were not disclosed, NovaMedica said the Pfizer investment will be part of $200 million the company expects to see over the next 5 years from investors.

The Pfizer ($PFE) deal calls for NovaMedica to license technology for production of more than 30 products including treatments for cancer, inflammatory disease and fungal infections, it said. Most of the drugs are on Russia’s essential medicines list.

“The collaboration between Pfizer and NovaMedica is a good example of working together simultaneously to localize a diverse portfolio of products that are essential to patients, and in high demand by healthcare professionals,” Petra Danielsohn-Weil, regional president of Pfizer in Europe, said in an announcement.  

NovaMedica board member Brian Dovey, said the deal with Pfizer “provides a major boost toward NovaMedica's goal of becoming a world class leader in the fast-growing Russian pharmaceutical market.”‎ Dovey is a partner in U.S. venture capital firm Domain Associates, which partnered with Russian investment fund Russano to create NovaMedica in 2012.

As for Pfizer, this is its third deal in several years to establish local manufacturing, a condition that Russian leader Vladimir Putin has put on foreign drugmakers if they want to do business in the country. While some Big Pharma players such as AstraZeneca and Novo Nordisk have built their own plants, Pfizer is relying on local partners.

In 2015, Pfizer completed the transfer of technologies to NPO Petrovax Pharm for it to produce Pfizer blockbuster pneumonia vaccine Prevenar 13 at a plant in the Moscow area. And in January, Pfizer signed an agreement for POLYSAN Scientific and Technological Pharmaceutical to manufacture the company’s Lipitor, Xeljanz and Zyvox at its plant in Saint Petersburg. Manufacturing of the first commercial batches of the medicines is expected in 2018.  

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