Russia’s Pharmstandard To Spin Off Over-The-Counter Business

Pharmstandard, Russia's leading drugmaker has started steps to spin off its over-the-counter medicines business, it said on Monday.

The Russian company, majority owned by businessmen Viktor Kharitonin and Egor Kulkov, said in a separate statement that it is planning to buy a Singapore-based company called Bever Pharmaceutical in a deal valued at $630 million. It gave no further details about Bever's business or whether the two transactions are connected.

The separation of its over-the-counter business will be into a separate legal entity, the company said, but gave no further details about the structure of the new company or whether it would be listed. The company said it would hold a conference call on Wednesday to give more details of the spin-off. Pharmstandard generated 51 billion roubles ($1.55 billion) in 2012 sales, including its own drugs and third-party products.

Sales of drugs produced by Pharmstandard rose 3% to 20 billion roubles, with the over-the-counter segment contributing 15 billion roubles - a year-on-year fall of 4.5%. Revenues from prescription medicines rose 33% to about 6 billion roubles. A report in June said that Pharmstandard's over-the-counter business could be valued at around $2.5 billion - around the same as its market capitalisation.

Pharmstandard's shares are traded in Moscow and as depositary receipts in London. Its London-listed shares are trading around 38% higher than the $14.55 at which it was priced when it went public in May 2007.