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Novartis strikes Russian allegiance; builds manufacturing plant

By Alexandria Pešić , 21-Dec-2010

Novartis will build a new $500m (€379.9m) pharmaceutical manufacturing plant in St Petersburg, Russia after signing a Memorandum of Understanding (MoU) with the city.

The five-year partnership addresses three core areas: local manufacturing, research and development partnerships (R&D) and public health development.

Joseph Jimenez, Novartis CEO, said the addition of the new manufacturing plant will ramp up the drugmaker's long term growth prospects, and help fulfill “the ambitious healthcare goals of the Russian government”.

One such ambition, as voiced by the Russian President Vladimir Putin at a meeting in Ivanovo, is to modernise healthcare in the former Soviet republic.

Putin said: “Regional programmes should provide for better quality and accessible healthcare in every region.

“They will have to determine what new techniques will be applied in our medical institutions so that patients have quality treatment not only in regional hospitals but also at local hospitals, including through the creation of major district-level medical centres,” he added.

Novartis says its state-of-the-art St. Petersburg facility represents an important investment in the pharmerging country, and will benefit the Russian Federation by providing access to breakthrough technologies and skills.

“The ongoing partnership with Russia enables us to expand our commercial presence in a key emerging market,” Jimenez said. “The scientific development and public health efforts have been prioritised to focus on the most beneficial programs for the Russian people."

Construction of the site is expected to begin in 2011. Once complete the company says it will manufacture branded generics as well as innovator products.

Novartis claims the plant will be one of its biggest investments in local manufacturing, producing around 1.5bn units per year to serve the needs of the Russian market, with further measures being put in place to cater for drug requirements across the globe.

Widening R&D investments

As well as establishing the St Petersburg unit, Novartis has revealed plans to invest more in R&D and public health collaborations by working with universities, academia and emerging Russian private businesses which specialise in medical science.

From there, it will out-license Novartis compounds to Russian companies, in-license and identify promising drug candidates from Russian scientists and universities, and conduct modelling and simulation activities for clinical trials.

Promising to widen its input in drug development in Russia, Novartis said it will double investments in clinical trials, and looks to enroll 4,000 patients by 2013.

Although Russia suffers an abundance of unmet medical needs, the country is a fast growing emerging market and the Russian government has sought to improve the country's healthcare system.

A Novartis spokesperson said: “With its increasing commitment to and demand for better healthcare, the Russian government is well suited to partner with Novartis to address their healthcare priorities and improve healthcare outcomes.”

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