Novo Nordisk injects some hi-tech optimism into Russia

By bne IntelliNews May 10, 2010

Guy Norton in Moscow -

Danish pharmaceutical company Novo Nordisk has given some added thrust to Russia's drive to become a major high-tech drugs manufacturing centre with a deal to build a state-of-the-art insulin production facility in the western Russian region of Kaluga.

The pioneering agreement was made during the course of a visit to Denmark by Russian President Dmitry Medvedev at the end of April, during which Novo Nordisk's president, Lars Rebien Sørensen, and Kaluga Oblast's governor, Anatoly Artamonov, inked the deal to set up a factory in the Technology Park Grabtsevo, with investment in the multi-stage project set to total $80m-100m. Once complete, it will employ upwards of 225 people manufacturing diabetes-fighting insulin in Novo Nordisk's patented Penfill cartridge and FlexPen formats. "Build-up and expansion of the plant is planned to be stepwise and gradual over a number of years to ensure high quality of products and sustainable transfer of technology and knowledge to the plant and local employees," says Sørensen.

Under the terms of the deal, the Kaluga government will supply all the necessary infrastructure needs of the plant in terms of road links and utilities, while the facility itself will be fully owned and operated by Novo Nordisk. "For more than two years, we had been looking very carefully at different regions and sites across the Russian Federation before a decision was made to build in Kaluga. So far, we have been very happy with this decision and hope that we will continue working with the Kaluga government towards a successful realisation of the investment project and changing diabetes in Russia," says Sergey Smirnov, chairman of Novo Nordisk's Russian operations.


Around 3m Russians currently receive diabetes treatment, but according to recently published estimates from the International Diabetes Foundation another 7m Russians should be receiving treatment. Novo Nordisk's decision to set up shop in Kaluga should, therefore, contribute greatly to fighting the growing diabetes epidemic in Russia and should help prompt greater awareness of the dangers of the disease and improve access to care for sufferers. Novo Nordisk sees sales of its diabetes treatments in the Bric markets, which also include Brazil, India and China, to grow rapidly over the coming years as people become richer, live longer and do less exercise. Diabetes is on the rise in emerging markets and could affect 174m people across the Bric countries in 2030 compared from around 113m people today.

Sergey Tsyb, a director at the Russian ministry of industry and trade, says that the Novo Nordisk plant fits perfectly with the government's plans to encourage the introduction of innovative technologies in the drugs industry in Russia and sets the stage for making Good Manufacturing Practices (GMP) compliance mandatory for all pharmaceutical production by January 1, 2014.

The deal is also a feather in the cap of ambitious Kaluga governor Artamonov, who says that the project is a vital importance for the establishment of a pharmaceutical cluster in the Kaluga region and will help to create of a pool of biopharma production specialists for the entire country.

Meanwhile, President Medvedev hailed the agreement as an example of improving Russo-Danish relations, which have been improving on the trade front, but dogged by Danish political concerns over Russia's human rights record. Speaking at the first ever Russo-Danish business forum in Copenhagen, Medvedev praised Denmark's decision as the first country to agree to the construction of the Nord Stream gas pipeline, which should ensure lucrative European market access for gas titan Gazprom. "I think this is a sign of wisdom and at the same time pragmatism, because there should be nothing of ideology in this kind of context. We should be pragmatic and act in the interests of our countries."

While promising improved dialogue with state, civil society and non-governmental organizations over human rights issues, Medvedev cautioned that Russia would not tolerate any foreign interference in its internal affairs. "These are our problems and we will solve them by ourselves."

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