Roaming forward Anatoly Firsov
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Born on November 20, 1972 in Novosibirsk, graduated from Novosibirsk State University. In 1999, he founded the investment company Profit-House and actively participated in corporate wars, in particular, in 2001 he bought shares of Aeroflot for the owners of Sibneft. In 2003, together with Roman Abramovich and other shareholders of Sibneft, he acquired the pharmaceutical business from the American company ICN and created the Pharmstandard company. In the spring of 2007, following the results of the IPO, the capitalization of Pharmstandard amounted to $2.2 billion. Last year, Kharitonin bought out the share of Sibneft shareholders and became the largest private shareholder of Pharmstandard.
Marital status: married, two children
Dossier:
The Pharmstandard company, controlled by Viktor Kharitonin, has always been very closed to the public, like Kharitonin himself. For the first time, the shareholder structure of Pharmstandard was disclosed in a Citigroup report in 2006. According to the report, 49% of the company at that time belonged to the chairman of the board of directors of Pharmstandard Viktor Kharitonin, 21% to Evgeniy Kulkov, 17% to Roman Abramovich, 6% to the head of Millhouse Evgeniy Shvidler, 7% to Millhouse Capital Management.
The market has known that Roman Abramovich’s structures have a stake in Pharmstandard since 2004. Then the Profit House company, associated with Millhouse, bought five pharmaceutical plants from ICN for $55 million; Pharmstandard was created on their basis. In 2005, according to market participants, its head, Viktor Kharitonin, became the company's controlling shareholder.
Source: Newspaper “Kommersant” No. 204 (3535) dated October 31, 2006
According to Pharmstandard OJSC on the MICEX and the London Stock Exchange (LSE), the Cyprus company Augment Investments Ltd bought a total of 17.1% of the OJSC from Roman Abramovich, Evgeniy Shvidler and Mr. Abramovich’s asset manager Millhouse.
According to SPARK-Interfax, since January 1, 2008, Augment has consolidated all 56.7% of Pharmstandard OJSC (another 43.3% is in free circulation on exchanges). Pharmstandard financial director Elena Arkhangelskaya clarified that Augment is 70% owned by Viktor Kharitonin, chairman of the board of directors of Pharmstandard, and another 30% owned by Yegor Kulkov.
Experts said the reason for the deal was that the main shareholder of the company, Viktor Kharitonin, wanted independence.
Source: Newspaper “Kommersant” No. 51 (3868) dated March 28, 2008
For the first time, the Pharmstandard company and, accordingly, Viktor Kharitonin came to the attention of the press in connection with an extremely negative story in 2008. Moreover, this happened in St. Petersburg, where both owners of the Genesis group of pharmaceutical companies, Alexey Khromov and Vladimir Grigoriadi, unexpectedly committed suicide. Both tragedies occurred against the backdrop of negotiations that the deceased conducted with Kharitonin himself and his inner circle regarding the sale of part of their business to Pharmstandard. Moreover, there were suggestions that the businessmen committed suicide under the influence of psychotropic drugs, which it is unclear how they entered their bodies precisely during the period of time when negotiations with Pharmastandard took place.
The business of Vladimir Grigoriadi and Alexey Khromov consisted of three key areas: production, wholesale supply of medicines and their retail sales. According to the official website, one of the largest pharmaceutical holdings “Genesis” includes three companies: production - “Vertex”, wholesale - “Genesis” and the pharmacy chain “Pervaya Pomoga”.
Source: “Your Privy Councilor” from 12/08/2008
Soon after the strange suicides, an external monitoring procedure was introduced at Genesis JSC. This happened following a statement from the management of Genesis itself that the company was declared bankrupt.
In addition, a certain citizen Melenko contacted the Department of Economic Crimes of the Department of Internal Affairs for the Krasnogvardeisky district of St. Petersburg with a statement about the possible theft of products from one of the largest pharmaceutical concerns in Russia, Pharmstandard OJSC. In his statement, a representative of Pharmstandard actually accused Genesis of stealing drugs produced by Pharmstandard. An investigation was carried out based on this statement, a criminal case was even initiated, which did not lead to anything concrete.
Source: “Your Privy Councilor” from December 22, 2008
Due to Kharitonin’s closeness, the first serious, extensive material about him appeared only in 2009. It began with a description of the story when, in May 2008, several employees of the Russian company Pharmstandard arrived in the Indian state of Bihar. They wanted Sanjeev Kumar, the owner of the Russian-registered pharmaceutical company Intercare. It is unlikely that the meeting took place in a friendly atmosphere: the Indian company owed Pharmstandard 50 million rubles. It is unknown what arguments the representatives of the Russian company used, but already in June Intercare LLC, along with all its property (including real estate in the center of Moscow), became the property of structures close to the owners of Pharmstandard. Not only Pharmstandard had claims against Kumar - the Moscow Arbitration Court registered more than a hundred claims from banks, pharmaceutical plants and service companies against Intercare, the total amount of his debt was about $10 million. However, it was quick to find in densely populated India a fugitive businessman who hastily left Russia in March 2008, only Pharmstandard succeeded. How? In this regard, journalists' sources hinted at Viktor Kharitonin's connections with high-ranking law enforcement officials.
Speed of decision-making and support from influential figures are the features of doing business that are characteristic of the owner of Pharmstandard, Viktor Kharitonin. In five years, he managed to create the largest Russian pharmaceutical company from a handful of enterprises that were in a state of bankruptcy. The holding includes four pharmaceutical plants (production capacity of 1.3 billion packages of drugs per year) and a medical equipment plant. A crisis? It seems that Pharmstandard didn’t even notice it - according to the results of the first half of 2009, the company’s revenue amounted to 10 billion rubles (an increase of 62%), net profit - 2.6 billion rubles (an increase of 47%).
While still a student in Novosibirsk, Kharitonin, together with classmate Yegor Kulkov, was engaged in the trade of consumer goods. In 1994, friends moved to Moscow and created the brokerage firm Profit-House. Back in the 1990s, Kharitonin became acquainted with the pharmaceutical industry. True, at that time he considered the owners of drug production enterprises only as potential clients: Profit House bought shares in factories for the Vremya company (later turned into Pharmacy Chain 36.6) and for the Domestic Medicines holding (now called "Valens") Soon Kharitonin had more serious matters to deal with.
Having learned that the American pharmaceutical company ICN wants to get rid of its Russian business, Kharitonin suggested that Abramovich repeat the scenario implemented in the dairy and meat markets: buy up, restructure, consolidate and sell at a much higher price.
For $55 million, Profit House received from ICN five outdated pharmaceutical plants scattered throughout the country, which, with a total annual revenue of $100 million, managed to operate at a loss, and 96 ICN pharmacies. Kharitonin set about restructuring this enterprise, combining pharmaceutical assets - his own and purchased with Millhouse funds - into the Pharmstandard holding. First of all, he sold the 12-story office building to ICN in the center of Moscow for $15 million. In 2005, the Marbiopharm plant in Yoshkar-Ola was sold for approximately the same amount - the holding did not need it, because, like Ufavita, specialized in the production of vitamins. Production at the sites in St. Petersburg and Chelyabinsk was stopped, all equipment was transported to Kursk. The pharmacies united in the O3 network were sold to the distribution company Protek, which developed its Rigla network on their basis.
Having gotten rid of non-core or unprofitable assets, Viktor Kharitonin began preparing Pharmstandard for an IPO in 2006. Against the backdrop of the financial boom of the last five-year period, this was the surest way to sell part of the company’s shares as profitably as possible and pay off Roman Abramovich and other Sibneft shareholders who invested money in the creation of Pharmstandard.
Shortly before the IPO, Aresbank, close to the owners of Pharmstandard, began actively lending money to distributors, encouraging them to purchase Pharmstandard products.
Pharmstandard demonstrated the presence of informal connections in the Russian government, becoming the largest domestic manufacturer of insulin. Pharmstandard made it into the top ten largest insulin traders in Russia (Biosulin brand). The market share of the drug produced by the holding has increased 10-fold over the past four years - from 0.2% to 2%. Pharmstandard insulin is included in the DLO program - it is purchased for beneficiaries using budget money. “I know for sure that Roman Abramovich personally communicated with the then Minister of Health Mikhail Zurabov,” a former Ministry of Health official told Forbes.
In September 2006, Pharmstandard bought the Masterlek company for $146 million, which owned the rights to such drugs as Amiksin, Flucostat and, most importantly, Arbidol, the best-selling antiviral drug in Russia. According to experts, the purchase of Masterlek was a turning point that determined Pharmstandard’s leadership in the industry.”
Market participants with whom Forbes spoke call Kharitonin “a brilliant and effective businessman” and “a worthy student of Roman Abramovich.” By the way, Abramovich himself and other managers of Sibneft, a year after the IPO, when stock prices rose by another 50%, sold their shares to Kharitonin and Kulkov, who, like other associates of Abramovich, received a large company at their own disposal.
With the departure of Roman Abramovich Kharitonin from business, state support for Pharmstandard did not weaken. If Abramovich communicated with Zurabov when he was Minister of Health, then Kharitonin now communicates with his successor, Tatyana Golikova, and her husband, Minister of Industry Viktor Khristenko.
In August 2009, when President Medvedev asked Viktor Khristenko whether Russia could make innovative drugs and how much it would cost, he reported: Pharmstandard, together with the Lecco company, had already created the Generium research center, investing 600 million rubles and promising invest another 2 billion rubles. Of these, not a penny is budget. All investments will be repaid later through government procurement. Khristenko and Kharitonin are often seen together at conferences and meetings - they can walk arm in arm, discussing new projects.
The state, in turn, also helps Pharmstandard. Chief sanitary doctor Gennady Onishchenko and head of Roszdravnadzor Nikolai Yurgel in the spring of 2009 called on Russians to save themselves from swine flu not with imported Tamiflu and Relenza, which were recommended by WHO, but with domestic Arbidol and Remantadine. And if Remantadine is a generic that can be produced by anyone, then only Pharmstandard has the right to produce Arbidol. And this despite the fact that not all scientists are confident in the effectiveness of Arbidol not only against swine flu, but also against the most common flu.
Recently, a commission headed by Deputy Prime Minister Igor Sechin signed a protocol on the supply of products from Russian pharmaceutical enterprises to Cuba. Kharitonin was among the lucky ones.
The fact that Pharmstandard enjoys political support is also evidenced by the desire of foreign manufacturers to cooperate with it. In addition to producing its own drugs, the Kharitonin holding also distributes other people's drugs. The story that happened in May of this year with the drug Velcade is indicative. The Belgian company Janssen-Cilag, the manufacturer of Velcade, shrewdly entered into a distribution contract with Pharmstandard; Pharmstandard submitted an application for Velcade to participate in a government tender for a program for the purchase of expensive drugs for serious diseases. The lot amount is 2.5 billion rubles. Velcade's competitor was its exact copy, the drug Milanfor, a generic created by the Russian company Pharmsintez. The price of the domestic analogue was 30% lower, but on May 26 Milanfor was removed from the competition due to the “unreliability of the information provided.” And on May 28, a letter signed by Golikova was issued, in which, with reference to the opinion of unnamed experts, it was proposed to cancel the registration of Milanfor due to unproven clinical effectiveness. As Pharmstandard reports in its reports, the gross profit on the sale of Velcade was 4% of the supply volume, about 100 million rubles.
Now Khristenko’s department is preparing a strategy for the development of the pharmaceutical industry until 2020. According to officials' forecast, the volume of the Russian drug market will reach 1.5 trillion rubles by this time (in 2008 it amounted to only 361 billion rubles). And Russian producers, with the support of the state, must occupy at least half of this gigantic market. Now they control only 20%. Journalists assumed in advance that it would be Pharmstandard that would lead the import substitution process.
It would seem that what can unite drugs and auto racing? If we put aside possible accidents, it turns out that it’s business! Billionaire Viktor Kharitonin made his fortune in pharmaceuticals, and is now increasing it with the help of the Nürburg Ring formula track, which is known among F1 drivers as the “Green Hell”.
Viktor Kharitonin is one of those oligarchs who tries in every possible way to protect themselves and their personal lives from the media. Therefore, the early period of his biography, information about his parents, childhood and youth remain inaccessible to the general public.
Even the pharmaceutical tycoon's birthplace remains in question. Some sources claim that he is a native of Novosibirsk, while others say that Viktor Kharitonin’s homeland is Kazakhstan. The only thing that is known for certain is his date of birth - November 20, 1972.
Education
After graduating from high school in 1989, Viktor Kharitonin entered Novosibirsk State University, where he studied mechanics and mathematics for five years. Having received his diploma in 1994, the young specialist did not look for a job in his specialty, but immediately went into business, experience in which he gained while studying at the university.
Career and business of Viktor Kharitonin
As a student, Victor became interested in blackmail and brought it to the official level, registering his first company, Kreditinform, in 1993. In all matters, the entrepreneur’s partner was his fellow student Yegor Kulkov. After graduating from university, the young people went to seek their fortune in Moscow.
The capital received the aspiring businessman very warmly. Here Kharitonin quickly found fellow countrymen Alexey and Olga Svirin, who provided him with a partnership in the investment company Profit House. At the same time, Victor bought and sold vouchers, and also studied the laws of stock trading.
Among Kharitonin’s clients were the pharmaceutical companies Vremya, later renamed Pharmacy Chain 36.6, and Domestic Medicines, which later became the Valenta holding.
Kharitonin’s education and entrepreneurial talent allowed the businessman to head Profit House in 1995. Four years later, his investment company began to interact with the Milhouse Capital company, owned by Roman Abramovich.
Thanks to Kharitonin, in 2001, the owners of Sibneft acquired shares in Aeroflot. A friendship began between Kharitonin and Abramovich, which played an important role in the future activities of Viktor Vladimirovich.
Soon the businessman became the head of another investment company in Bashkiria. It was here that the foundation of Kharitonin's pharmaceutical empire was laid. It began with the shares of Ufa-Vita, an enterprise specializing in the production of medicines, acquired by Viktor Vladimirovich.
In 2003, after the departure of the American company ICN from the Russian pharmaceutical market, the companies of Kharitonin and Abramovich took over five factories and almost a hundred pharmacies remaining from ICN Pharmaceuticals. It was planned to consolidate unprofitable enterprises and sell them profitably. This is how the pharmaceutical holding Pharmstandard was founded.
Having taken on a relatively new business for himself, Viktor Kharitonin quickly gained a taste for it and showed enviable energy. The creation of Pharmstandard began with the disposal of unprofitable assets. The Moscow office and Yoshkar-Ola plant "Marbiopharm", which once belonged to ICN, went up for sale. The next step was the shutdown of Chelyabinsk and St. Petersburg production and the sale of the 03 pharmacy chain.
In 2006, Kharitonin and Abramovich took possession of the assets of the Masterlek company. This pharmaceutical organization became widely known thanks to Flucostat, Amiksin and Arbidol. The last antiviral drug was of particular importance because it was the most in demand on the Russian market.
Having prepared the holding for sale, Kharitonov decided not to part with his brainchild and, thanks to a skillfully conducted IPO, in 2008 he became the sole and rightful owner of the Pharmstandard holding.
By this time, the organization had transformed and taken a leading position in its field. In addition to four pharmaceutical plants, the holding included an enterprise producing medical equipment. In addition, Viktor Kharitonin became the owner of the trademarks “Pentalgin”, “Complivit”, “Kodelac” and others.
The skillful management of Viktor Vladimirovich saved the holding from problems caused by the global economic crisis. On the contrary, in 2009, Kharitonin’s organization increased its profits by almost half. This was facilitated by the entrepreneur’s connections and contacts, as well as the fact that his organization gained a foothold in the top ten largest insulin manufacturers. Three years later, the holding expanded to include the pharmaceutical companies Biomed, Lecco and Pharmpark.
Since the spring of 2014, Pharmstandard securities have been permanent participants in the London Stock Exchange, and the holding itself is the undisputed leader in the production of pharmaceutical products in Russia.
The biography and career of Viktor Kharitonin is not limited to Pharmstandard and stock trading. The businessman has taken and is taking part in scientific developments. One of these projects was the creation of the Generium biotechnology center, which Viktor Kharitonin carried out together with Alexander Shuster starting in 2007.
Now “Generium” is known far beyond the borders of the Russian Federation. The center is developing drugs aimed at fighting cancer, hemophilia and other intractable diseases. Scientists from the United States, Germany, France and others are involved in the activities of the organization.
The center has the most modern equipment and uses innovative technologies. In addition to research work, Generium covers the educational sphere. Victor Kharitonin is the main shareholder and investor here.
As a person who is far from indifferent to the world of motorsport, in 2014 Viktor Vladimirovich became interested in the fate of the Nuremburg Ring, a track that was one of the stages of the most prestigious Formula 1 automobile competition.
By that time, it turned out to be practically ownerless, and Kharitonin did not fail to take advantage of this opportunity. For €10 million, the entrepreneur bought 67% of the shares of the racing complex, and in 2016 a deal was made that allowed the businessman to become the sole owner of the Green Hell.
As befits a real businessman, Viktor Kharitonin did not make the Nürburg Ring an expensive toy - the track brings profit to the oligarch.
Anyone can take a ride to the places where the legendary Schumacher drove in one of the supercars owned by the entrepreneur. Entertainment costs $30 thousand. Moreover, this figure applies to weekdays; a weekend here will cost much more.
Viktor Kharitonin often turned to development activities. In 2010, the North Tower business center was under his control. In 2017, the entrepreneur became the owner of the Gorbushkin Dvor center, buying a controlling stake for $0.5 billion. In addition, Viktor Vladimirovich plans to develop Bolshoy Novovorobinsky Lane.
A photo of Viktor Kharitonin in Forbes magazine appeared in 2010 and since then, with the exception of 2014, the businessman’s name has never left the prestigious ranking of Russian oligarchs.
The billionaire’s main assets include shares of the pharmaceutical holding Pharmstandard, the Cyprus company OTCPharm, the Northern Tower shopping center, etc.
Using data provided annually by Forbes, you can familiarize yourself with the dynamics of changes in Viktor Kharitonov’s fortune over the last period (years - $, billion / place in the ranking of the 200 richest Russians):
- 2011 – 1,5/70;
- 2012 – 0,95/105;
- 2013 – 1/109;
- 2015 – 0,95/101;
- 2016 – 1/77;
- 2017 – 1,2/81.
In 2018, a businessman with a fortune of $1.4 billion settled in 74th position in the ranking.
In addition to elite Moscow real estate, the pharmaceutical tycoon is the owner of two apartments in One Hyde Park, the most fashionable residential complex in the English capital. The price of one square meter of living space here is about $124 thousand.
In addition, Viktor Kharitonin’s capital is located in the Nürburgring racing complex, for which the entrepreneur paid a total of about €70 billion.
The private life of Viktor Kharitonin
Finding out anything about his personal life in the biography of Viktor Kharitonin is very problematic. This does not mean that the billionaire is unsociable, he just avoids contact with the press.
A reliable fact is that the businessman is married. His wife Irina Viktorovna was born in 1973. The couple has two children.
Among Viktor Kharitonin’s hobbies, the passion for expensive sports cars is most often mentioned. Thanks to this hobby and the German racing complex, the businessman often communicates with his friends, among whom one can see billionaires and influential people, in particular Roman Abramovich, who likes to demonstrate the capabilities of his supercars to the general public.
As for influential friends, Kharitonin’s name is often mentioned together with the names of Tatyana Golikova, Deputy Prime Minister of the Russian Federation, and her husband, Viktor Khristenko, ex-Minister of Russian Industry.
The scam with the drug "Arbidol" has not yet been completely forgotten, when, as a result of the active efforts of the chief sanitary doctor of the Russian Federation Gennady Onishchenko and the then Minister of Health Tatyana Golikova, a drug of questionable effectiveness. Since then, the swine flu panic has subsided and Golikova has left her position. But the founder of Pharmstandard, Viktor Kharitonin, protected himself in this case too. Instead of lobbying for drugs, he is going to cut funding for entire scientific areas of the same quality as Arbidol. How this one of the richest Russians speculates on the slogan of import substitution is described in the Forbes article.
Kharitonin and Kulkov assessed the investment prospects for drug production by purchasing the UfaVita plant together. “It was a spontaneous deal; the asset was good, but greatly undervalued. We were going to resell it later,” recalls Egor Kulkov, now co-owner of Pharmstandard.
Three years later, when the American ICN put up five of its factories in Russia for sale, Kharitonin came up with an offer to finance the deal for Roman Abramovich, for whose structures Profit House bought up shares of Aeroflot, energy and oil companies. The assets of ICN were combined with UfaVita into the Pharmstandard company; Abramovich withdrew from its capital after the IPO in 2007.
And seven years later, Millhouse again partnered with Pharmstandard in a deal to purchase a 70% stake in the biotechnology company Biocad from founder Dmitry Morozov and Gazprombank. As follows from Pharmstandard’s reporting for the first half of 2014, the company spent about $100 million on its 20% stake. “Biocad fits perfectly into our strategy - to invest in the technologies of the future. And Victor is a visionary businessman with strong market vision and a valuable ability to create shareholder value. "He's also one of the smartest, nicest successful people you'll ever meet," explains Millhouse's spokesman John Mann.
Kharitonin himself speaks reluctantly about his partnership with Abramovich: “Of course, we communicate. But I, like Roman Arkadyevich, don’t like to talk about third parties.”
Biocad is a resident of the special economic zone "St. Petersburg". About 1,000 of its employees are involved in the creation of drugs based on monoclonal antibodies and small molecules, and bioinformatics. There are results. Last year, Biocad released a biosimilar to rituximab, a substance used in the treatment of lymphomas. Before this, rituximab was produced exclusively by the Swiss company Roche; its drug MabThera was the most expensive in the government procurement program “Seven High-Cost Nosologies” - in 2013 it accounted for 9.5 billion rubles (the exclusive distributor, by the way, was Pharmstandard). In 2014, the tender was won by rituximab from Biocad - the drug "Azcelbia", the retail package of which costs 15% less than "MabThera". The contract for 5.85 billion rubles immediately doubled the share of domestic drugs in the public procurement system - from 13% in 2013 to 26% in 2014.
In addition to Pharmstandard, almost all “big pharma” players applied for the Biocad package. Dmitry Morozov, a former co-owner of Centrocredit Bank, ultimately chose Kharitonin, who did not offer the highest price, but did not claim 100% of the shares. “I am very comfortable with the current shareholders. Kharitonin’s “interface” is as fast as mine, we understand each other perfectly. And on most issues related to the industry, our opinions coincide,” says Morozov.
Two deals of Kharitonin, held with the participation of Abramovich, perfectly illustrate the evolution of Pharmstandard over 10 years.
Russian bears
“Previously, on the site of the Generium biotechnological center there was a swampy meadow, we poured a million cubic meters of sand and earth here,” recalls Alexander Shuster. In 2007, he invited Kharitonin to join his new research project - the creation of a biotechnology center not far from the Pokrovsky Biological Products Plant. Kharitonin came to Volginskoye, inspected the site and gave the go-ahead to launch the project.
Known to Kharitonin for over ten years Andrey Dementyev, former deputy supervising including pharmaceuticals, Minister of Industry Viktor Khristenko, recalls that at first they discussed the project not as a commercial one, but rather as a research and educational one. “We were discussing even before Skolkovo whether it was possible to attract people from the other side of the border,” Dementyev recalls in an interview with Forbes. After leaving the civil service in 2012, he became a shareholder of the Generium International Business Center. He and his colleagues Andrei Reus, who resigned from the ministry in 2007, 12.5% of shares. Both note that they are interested in the investment potential of pharmaceuticals.
Kharitonin, Kulkov and Shuster succeeded. Now a third of Generium employees are repatriates with experience working in laboratories in Germany, France, and the USA. How do they lure them? 70 townhouses and cottages on the territory of the scientific center are intended for families of employees. The latest equipment. Salaries before the fall of the ruble were higher than in the West. In addition, people have the opportunity to work with advanced technologies by world standards.
Technology transfer is supported by the state; from 2011 to November 2014, the Ministry of Industry and Trade allocated 4.4 billion rubles to manufacturers for this. In the first year after its creation, Generium received three government contracts worth 300 million rubles for the transfer of foreign technologies.
A year earlier, the owners of Pharmstandard acquired a controlling stake in the Danish biotech startup Affitech. “We then gained wonderful experience in managing a public company in Europe,” recalls Kharitonin.
The Scottish lord, the Dane, the Americans and the British who were on the board of directors behind their backs called the new shareholders either “the big brown bear” or “these Russians.”
“The entire management and existing board of directors were determined to eat investors’ money,” recalls Shuster. The agreements reached were not implemented - managers referred to regulators, rules and instructions. The co-owners of Pharmstandard acted decisively - they increased their stake to 100% (costing €60 million), and then withdrew the company from the stock exchange.
At Affitech, they were interested in two unique technology platforms that made it possible to produce monoclonal antibodies. After purchasing the company, Generium employees were sent to Oslo, where the headquarters were located, for training. And then they loaded the equipment, robot, archive of cultures and genes into containers and transported them to Russia. The developments helped Generium in the creation of Apagin - this drug against intestinal cancer, ovarian, lung and breast tumors entered the final stage of clinical trials in the spring.
Today, the venture capital company Inbio Ventures, headed by Alexander Shuster, is looking around the world for biotech startups that have late-stage developments in their portfolio. “When entering capital, we immediately warn that the rights to drugs in Russia will be ours, we know the market here better, we know the prices,” says Kharitonin.
In the German CODON (specialization - restoration of cartilage surfaces) Russians have 20%, in the American Argos Therapeutics Inc (development of anti-cancer vaccines) - 30%. Their technologies made it possible in August 2014 to launch pilot production of drugs based on cloning the cells of a specific patient; Seltera-Pharm CJSC is engaged in this within the framework of the Generium project. In fact, we are talking about personalized medicine: for example, 100-200 ml of blood and pathological cells are taken from a patient with kidney cancer, from which a medicine is created for this specific patient within 7-10 days. “The vaccine differs from existing ones in that it teaches the immune system to recognize tumor cells,” says Artem Eremeev, deputy general director of Seltera. In the USA, according to him, such a course costs $120,000, while the domestic one will cost 2–2.5 times less. Clinical trials are currently being conducted in Europe. In Russia, the law on cell technologies has not yet been adopted; the third reading is due to take place in the State Duma in May. As soon as it is accepted, Kharitonin will launch large-scale production - the enterprise will be able to produce 20,000 cell-based anti-cancer vaccines per year and provide material for 50-60 joint surgeries per month.
However, Kharitonin and his partners have already made money from investments in Western biotech - in February 2014, when Argos Therapeutics entered the Nasdaq stock exchange, the Russian stake was valued at 2.5 times more expensive than the initial investment - $74 million. A year later, however, the quotes fell a lot, but they are already growing again.
“Biotech is a riskier business than pharmaceuticals; not all research can result in the creation of a finished drug. But income growth is also explosive if suddenly the medicine works,” Morozov from Biocad says knowledgeably.
Domestic medicines
“Here the scale is different, the projects are more interesting. We are engaged only in what 90% will be implemented, and not in pure science,” says General Director of the IBC “Generium” Ravil Khamitov. The retired colonel, who used to develop defenses against weapons of mass destruction, does not regret accepting Shuster’s offer to head the research division a year ago.
Currently, Generium has eight ready-made drugs based on recombinant proteins, and fifty more are in development. The priority is high-tech drugs that could replace expensive foreign drugs in the “Seven Nosologies” state program. At the end of 2013, Pharmstandard, according to DSM Group, ranked sixth in terms of sales volumes, Generium - thirteenth. And one of his developments - the drug "Coagil" for the treatment of hemophilia (the seventh factor of blood clotting) - is one of the ten drugs for the purchase of which the most funds are allocated from the budget.
The policy taken by the state towards import substitution opens up new enrichment opportunities for Pharmstandard shareholders. In February 2015, Olga Golodets, Deputy Prime Minister for Social Affairs, visited Generium for the first time. Kharitonin assures that he learned about the visit in just a day and a half - the initiative to show the capital’s guests the innovative enterprise came from the governor Svetlana Orlova, which strongly supports the project. Golodets’ impressions were “very positive.” Approximately like Golikova before giving Pharmstandard an order for Arbidol for state money.
When asked about his relationship with Kharitonin, Golodets replies that “just like with him, I am familiar with all the prominent market players.” Representatives of all major manufacturers communicate with the Deputy Prime Minister within the framework of the subcommittee on the circulation of medicines under the government commission on the protection of public health. Kharitonin notes that now the dialogue with the state is systematized and “there is no need to walk around offices and whisper something.”
A millionaire always attributed administrative resource and special friendship with the previous Minister of Health Tatyana Golikova and her husband, head of the Ministry of Industry and Trade Viktor Khristenko.
Golikova headed the Ministry of Health in 2007; Pharmstandard just then began to actively develop the public procurement segment. A year later, Prime Minister Vladimir Putin holds a meeting on the development of the industry at the Pharmstandard plant in Kursk, where he was shown the product in person. Having first appeared in the top twenty leading suppliers for the “Seven Nosologies” only in 2010 (17th place), in 2012, when Golikova left the Ministry of Health for the Accounts Chamber, Pharmstandard was already in seventh place in terms of money.
We can recall another sensational story. Being the exclusive distributor of the antitumor drug Velcade produced by the Belgian company Janssen-Cilag, Pharmstandard entered into a tender for “Seven Nosologies” in 2009. The Russian generic drug Milanfor from the Pharm-Sintez company, which was registered shortly before and was 30% cheaper, was withdrawn from the competition. “The conclusion is simple: look for who benefits. There remains a monopoly in the field of government procurement. The only drug left is Velcade. The rights are enshrined in Pharmstandard,” says Timofey Petrov, CEO of Pharm-Sintez. At the same time, he has no complaints about Kharitonin himself, whom he considers a “high professional”: “We work in Russia, so when there is an opportunity to influence a competitor, whoever has more rights is right.” Now Velcade, which ranks second in sales under the state program, is produced under contract at the Pharmstandard plant in Ufa. Requirements to localize production in Russia for manufacturers whose drugs are included in state programs come from the government. True, Western companies are reluctant to share technologies. “Only when they reach the point that it is no longer possible not to share,” Kharitonin smiles.
He seems to have become very tired of conversations about administrative resources over all these years. He speaks of Khristenko with great respect, but assures that no one introduced them behind the scenes, it was a normal work process. “Viktor Borisovich was the ideologist of the industry development strategy “Pharma 2020”; we, as the largest manufacturers, were involved in the development, so we communicated and continue to communicate to this day,” says the millionaire. He patiently explains why Dementyev and Reus became shareholders of Generium: they have known each other for a long time, people have retired, they need to work somewhere.
Reus, when asked about lobbying, replies that he has extensive experience in staff work and that is why Kharitonin offered him a place on the board of directors of Pharmstandard, and later Generium. “An administrative resource is an understanding of structures and ways of interacting with them. This is an important aspect; I have worked in this field for quite a long time. I understand the mechanism from the inside. Formulations and proposals are important, it is important to understand what the regulator can do and what questions need to be asked in order to make the conditions as acceptable as possible,” he says.
“Other companies often come to us with different projects. Many people come across “availability of administrative resources” in their presentations. I ask, whose is this? Yours, they say. Cross out the point right away,” Shuster laughs. And he reminds that the company remained among the market leaders even after the change of government. And that she, like everyone else, has problems. For example, the drug “Innofactor” for patients with hemophilia, developed at Generium, was denied registration last August. Governor Orlova, at a meeting with President Putin on September 17, described to him how important the domestic product is: Generium drugs have already provided the budget with savings of more than 4 billion rubles on purchases. On October 10, after Putin’s personal order, “Innofactor” received registration, but did not manage to get into the “Seven Nosologies” program.
Now Pharmstandard is the only domestic company that produces three blood clotting factors at once. And next to Generium, construction is underway on one of the largest plasma fractionation plants in Europe; the first floor is already being built. Kharitonin plans to invest another 6 billion rubles in this project.
“In Russia, less than 10% of its own blood products, the rest are all imported. If sanctions are imposed, we will sit down immediately,” he explains the importance of the project.
The topic of blood opens up the prospect for his company to become not only a supplier, but also a partner of the state. The state corporation Rostec entered the plasma market, gaining control over the capital's NPO Microgen in March 2015, one of whose areas of work is related to the production of blood and plasma products. A source at Pharmstandard does not rule out that the unfinished Kirov plant for the production of blood products will also come under the control of Rostec. Pharmstandard would be interested in participating in this project within the framework of a public-private partnership (at least a blocking stake is held by the state, the rest by the project operator). “We hope to cooperate with Rostec; we would like to be useful to them in some way,” Kharitonin modestly notes.
Pharmstandard is one of the possible partners for the state corporation for the implementation of projects on import substitution, the development of new medicines and the organization of pharmaceutical production. But at this stage, no specific decisions have been made on the further format of cooperation,” Rostec told Forbes.
The interests of a businessman and the state in the field of import substitution coincide. “We are interested in high-tech drugs,” says Kharitonin. - The more marginal the product, the more we can invest in R&D. And with your developments you can enter the world market.” Although, most likely, all this will end in an adventure with pumping out state money, similar to the Arbidol one.
