Friday, October 19, 2012

Abbott Laboratories (NYSE:ABT) Intends To Buy Russia-Based Petrovax

Abbott Laboratories(NYSE:ABT), the pharma giant has filed an application to own Petrovax Pharm of Russia, its flu vaccines partner. Such an agreement would become one of the top three largest in the history of pharmaceutical market in Russia.

A group of Russian flu vaccine researchers had founded Petrovax in 1996. It was last year when the company’s sales had hit $98 million, as per reports of Izvestia. That had placed the company 12th among other domestic pharma companies. None of the companies have commented on this matter.

Izvesti’s sources have said that Abbott has filed for approval to buy 62.5% of Petrovax. This would include the 25% shares of the European Bank for Reconstruction and Development acquired in lieu of $27 million in the year 2008, the 18.77% shares of Arkady Nekrasov, the co-founder and CEO and 18.74% shares of Natalya Puchkova, fellow co-founder. Petrovax owns its remaining shares. Analysts have valued the agreement up to $294 million.

The agreement would make Abbott the only American company to possess production facilities in Russia. Yulia Nechayeva, a DSM analyst believes that Abbott intends on becoming localized in the Russian market. DSM says the company sells products worth $430 million every year in a market value of $30 billion, as the paper reports. That way, it does not even qualify for domestic top 19. Petrovax already makes Pfizer’s pneumococcal vaccine.

Russian analysts are of the opinion that acquiring Petrovax Pharm, the 12th largest local drug maker in Russia, can provide an opportunity to Abbott to start an active development in the Russian industry, including through the contribution in the State Reimbursement Program.

Petrovax Pharm’s current sales account for $98 million along with price-to-sales multiples of 2-3. The total deal could be valued in the range of $190-290 million. 

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