Abbott Announces Deal To Purchase Pharma Manufacturer Veropharm

Abbott Laboratories has announced that it has agreed to purchase Russian based Veropharm, a pharmaceutical manufacturer with a portfolio of more than 100 drugs. Veropharm has 3 different manufacturing plants throughout the country. The deal is for between $395 and $495 million, with Abbott Laboratories also assuming a debt load of $136 million. The final price tag on the deal will be based upon the number of Veropharm shares owned by Garden Hills— the holding company with controlling interest in Veropharm — at the purchase time.

Veropharm’s portfolio of drugs is believed to fit in well with Abbott’s own, and include candidates in women’s health, as well as cardiovascular, gastroenterology, oncology, and the central nervous system drug candidates. According to Reuters, Abbott Laboratories’ move into Russia is notable, given the political climate regarding U.S.-Russian relations. Russia’s economy has been slowing and the Ukraine crisis has led to a frosty relationship between Washington and Moscow. That relationship has induced sanctions, with U.S. government agencies requesting that many major US based companies withhold from investing in Russian based industries. Still, there are western based traders that feel optimistic about a growing pharmaceutical industry inside of Russia.

"Russia's middle class is growing and when the middle class grows the sector that grows is healthcare," said one trader. "There is an aging population and it is a country that really needs good pharma. If you want to get a part of that market you've got to be a local producer and this is a way for Abbott to be locally producing."

Abbott has stated that the company believes the purchase of Garden Hills and its controlling interest in Veropharm will ultimately add $150 million in sales in 2015.

This makes another acquisition for Abbott this year so far, which recently purchased Chilean pharmaceutical company CFR just last month.