Pharmstandard Divests Grindeks But Cooperation Continues

BMI View: Although Pharmstandard's sale of its stake in Grindeks has not created significant returns for investors, BMI believes the initial acquisition facilitated greater cooperation between the two firms, which was necessary for the successful sale of Grindeks products in Russia. The confirmation that Grindeks is willing to continue to work with the Russian firm on the sale, marketing and production of the cardiovascular drug Mildronate − which Pharmstandard markets in Russia −should limit the risks from this divestment.On October 29 2010, Russia's largest domestic pharmaceutical manufacturer Pharmstandard sold its 11.3% stake in Latvian generic drug producer Grindeks. The transaction totalled EUR12.4mn (US$16.6mn), a modest increase on Grindeks's April 2010 purchase price of EUR12.2mn (US$16.3mn).

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