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Business

Companies Eye Russian Links

Partnerships: Drug and chemical firms scope out the landscape in a market primed for growth

by Rick Mullin
July 11, 2011 | A version of this story appeared in Volume 89, Issue 28

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Credit: Dow Chemcial
Viktor Vekselberg (left), president of the Skolkovo Foundation, and Kostas Katsoglou, president of Dow in Eastern Europe.
Viktor Vekselbert, president of the Skolkovo Foundation and Kostas Katsoglou, president of Dow in the Easter Eurepe Growth Reagion announce letter of intent for R&D center in Saint Petersburg.
Credit: Dow Chemcial
Viktor Vekselberg (left), president of the Skolkovo Foundation, and Kostas Katsoglou, president of Dow in Eastern Europe.

Pfizer has joined other major drug and chemical companies in investigating the fast-growing Russian market. The firm has signed a memorandum of understanding with ChemRar High Tech Center, a Russian pharmaceutical investment and R&D group, to explore drug development and commercialization opportunities in Russia and other countries.

The agreement identifies possible technology transfer and licensing deals by which the two organizations can develop compounds and vaccines to treat patients with cardiometabolic and infectious diseases and cancer. “We see Russia as a potential leader in the innovative pharmaceutical, biotechnological, and nanotechnological areas,” says David Simmons, Pfizer’s general manager for emerging markets and established products.

AstraZeneca, which earlier this year began construction on a $150 million manufacturing facility in Russia’s Kaluga region, has announced plans for a Predictive Science Center in St. Petersburg. The new center will focus on developing bioinformatics, data analysis methods, and software to better predict the safety and efficacy of potential new medicines.

According to Kay Formanek, a managing director at the consulting firm Accenture, the Russian government has invested about $54 billion in the health care and life sciences sectors under its National Health Project, an effort to improve public health. She notes that a draft bill on patent protection that grants six years of exclusivity for new drugs was approved last year.

Such changes “create a context that is attractive for pharmaceutical companies that see stagnation in their mature markets and are looking to new territories for growth,” Formanek says.

The chemical industry is also looking to tap Russia’s market and talent pool. DSM, for example, just finalized two joint ventures between its engineering plastics division and KuibyshevAzot OJSC, a chemical company in the Samara region that specializes in caprolactam and derivatives as well as nitrogen fertilizers. And Dow Chemical has signed a letter of intent to define steps for its participation in the Skolkovo Project, a Russian science and technology commercialization venture.

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