Russia blocks Abbott Laboratories - Petrovax merger
20 Apr 2013
The Russian regulator has blocked the merger between US pharmaceutical giant Abbott Laboratories and Russian vaccine maker NPO Petrovax Pharm on the grounds that the Russian biotechnology firm was of national interest.
Citing the head of Russia's competition regulator, Reuters yesterday reported that the Russian government's commission on foreign investment has rejected Abbott's application to acquire Petrovax - a producer of vaccines for immunology and viral diseases.
The paper said that Igor Artemyev, head of the Federal Anti-Monopoly Service, told reporters that after reviewing the proposed acquisition, the regulator has rejected the deal.
Artemyev said the transaction was blocked on strategic grounds in order to protect the country's national security interests.
He added that the government would consider including vaccine production in its list of so-called strategic sectors, which would restrict foreign ownership of vaccine manufacturers.
In October 2012, Illinois-based Abbott offered to buy Petrovax in a reported $250-$295 million deal.
Under the terms of the proposed acquisition, Abbot would buy 25 per cent stake in Petrovax held by European Bank for Reconstruction and Development, 18.77 per cent from the company's co-founder and CEO Arkady Nekrasov, 18.74 per cent from co-founder Natalya Puchkova and the remaining from the company itself.
The deal would have made Abbott the first overseas pharmaceutical company to own vaccine manufacturing facilities in Russia.
The acquisition would also have been among the three largest deals in the Russian pharmaceutical market, after Canada's Valeant Pharmaceuticals acquired St Petersburg-based Natur Produkt for $180 million in March 2012 (See: Canada's Valeant Pharmaceuticals to acquire Russia's Natur Produkt for $180 mn) and Russian pharmaceutical firm Pharmstandard purchased its local rival Masterlek for $146 million in 2009.
Abbott was keen to acquire Petrovax since the Russian vaccine maker has an existing partnership to produce new generation flu vaccines at its new facility in Moscow with Solvay Pharmaceuticals, a Belgian drug company that Abbott had acquired in September 2009 for $6.6 billion in a cah deal (See: Abbott to acquire Belgian drug company Solvay for $6.6 billion).
Moscow-based Petrovax was founded by Russian influenza vaccine researchers Rem Petrov, Arkady Nekrasov, Natalia Puchkova and Rakhim Khaitov.
The company's flagship vaccines are influenza vaccine Grippol and Polyoxidonium, an immunomodulator.
At present, the company has over ten innovative products at various stages of development and eleven patents. Its strategy is based on marketing one innovative drug every year.
Petrovax has 4 manufacturing plants in Russia, about 500 employees and an annual turnover of around $100 million.
Apart from Russia, the company sells its products in the CIS and the EU, including Ukraine, Belarus, Kazakhstan, Kyrgyzstan, Azerbaijan, Uzbekistan, Georgia, Moldova, and Slovakia.
