Abbott doubles down on Russian manufacturing with Veropharm purchase

30-Jun-2014 - Last updated on 01-Jul-2014 at 08:45 GMT

With its purchase of Veropharm for up to $495m, Abbott is looking to tap into one of the largest Russian manufacturers of pharmaceuticals.

The acquisition will add significantly to Abbott’s manufacturing capacity as Veropharm’s base is comprised of three large facilities: one in Voronezh, which is a chemical and pharmaceutical plant, another in Belgorod, which is a ready-made medications plant, and a third in Pokrov, which is another pharma plant. Veropharm is also constructing a new state-of-the-art manufacturing facility at an undisclosed location.

With more than 2,000 employees, the facilities currently produce more than 240 treatments across 12 therapeutic groups, and have total annual production capacity of 591m tablets and capsules, 7m ampoules, 468m plasters, and 43m vials.

Abbott has also purchased one of the few Russian manufacturers that abides by GMP standards. The Belgorod facility meets WHO and EU GMP requirements, while the Voronezh facility conforms to ISO 9001:2008 standards.

Abbott spokesman Scott Stoffel told in-Pharmatechnologist.com “Abbott intends to build on Veropharm’s success to date with this investment to ensure long-term growth. Abbott will continue the production of medicines currently produced by Veropharm and is committed to providing Russian people with a reliable supply of high-quality medicines.”

The acquisition will also boost Abbott’s portfolio of medicines with Veropharm’s focus in women's health, central nervous system, cardiovascular, and gastroenterology, while also adding an offering in the field of oncology.

Under the terms of the agreement, Abbott, which has had a Russian presence in Moscow since 1978, will pay between about $395m and $495m to acquire Garden Hills, the holding company that currently owns a controlling interest in Veropharm. Garden Hills currently holds 80% of Veropharm, but is expected to own 95% when the deal closes.

Abbott will also assume $136m in debt.

The acquisition shows Abbott’s interest in manufacturing pharmaceuticals abroad is growing. Last month Abbott purchased CFR Pharmaceuticals for $2.9bn, which added manufacturing facilities in Argentina, Colombia, Chile and Peru.