Novartis Plans $500 Million Investment in Russia

Novartis (Basel) signed a memorandum of understanding with the city of St. Petersburg, Russia, confirming its intent to build a new full-scale pharmaceutical manufacturing plant there. The investment is part of an overall $500-million commitment in local infrastructure and collaborative healthcare initiatives planned by Novartis for a five-year period.

“Novartis is making a strategic investment in Russia for long-term growth,” said Joseph Jimenez, the company's CEO, in a Dec. 20, 2010 press release. “The ongoing partnership with Russia enables us to expand our commercial presence in a key emerging market.”

Once completed and approved for commercial production, the facility will produce both branded generic drugs and pharmaceuticals. Construction is scheduled to start in 2011, and the plant is expected to produce approximately 1.5 billion units per year.

In parallel with establishing a manufacturing facility in Russia, Novartis said it plans to continue to expand its investment in research and development and public healthcare collaborations with the Russian government. These activities include collaborations with universities and emerging Russian private businesses in various areas of medical science. These collaborations may include out-licensing of Novartis compounds to Russian companies, in-licensing and scouting for promising drug candidates from Russian scientists and universities, and modeling and simulation activities for clinical trials. Additionally, Novartis plans to double its investments in drug development in clinical trials in Russia and expects to enroll approximately 4000 individuals by 2013.

Novartis is a member of Russia’s Foreign Investment Advisory Council (FIAC, which was created in 1994 and consists of 42 foreign companies. Its purpose is to assist the Russian government in forging a favorable investment climate for international companies operating in Russia. Novartis is the only stand-alone pharmaceutical company that is a member of FIAC. Other members include BASF (Ludwigshafen, Germany), Procter & Gamble (Cincinnati), Ford Motor Company (Detroit), and Unilever (London), according to FIAC.