Russia's first post-crisis IPO

By bne IntelliNews October 22, 2009

Ben Aris in Moscow -

One of Russia's leading commercial biotechnology companies, Human Stem Cells Institute (HSCI), will become Russia's first post-crisis IPO when it lists on the Micex stock exchange at the end of November or early December.

It will also be a pacesetter, as it will become the first high-tech (not to mention Russia's first biotech) company to list, just as the Kremlin is throwing billions of dollars of resources into creating a high-tech sector pretty much from scratch.

Not that the company has had any help from the state. Founded in 2003 as a private enterprise, the company's bread-and-butter business is the extraction and storage of stem cells from the umbilical cord of newborn babies. A technology that has been around for about a decade, parents of newborn babies can choose to have the stem cells in their baby's umbilical cord stored in case they are needed for medical treatments in later life; umbilical cord stem cells are amongst the most dynamic and versatile the body will ever produce, as their main job is building babies.

In 2003, HSCI set up Gemabank to create this industry in Russia and already has some 7,500 clients (or about 60% of the market), revenues of some $5m for this year and is now actively expanding into the Russian regions, Ukraine and Kazakhstan. "It is a fast growing business. In more developed markets like Germany and the USA this type of service has been around five and ten years respectively and provide the service to about 2-3% of new parents", says HSCI General Director Artur Isaev. Sources familiar with the company say there could be a 10-fold growth in this business in the next five years.

HSCI has already set the price range for the offering of about 20% of the companies stock at between RUB9 and RUB11 per share, which values the company at between RUB675m ($22m) and RUB825m ($28m). The shares will be listed on Micex's newly created "Innovative & Growing Companies" section, which is designed to help small-cap companies list, and the money raised will be ploughed back into development. Alor Invest is the manager and bookrunner for the offering.

The offer prices values HSCI's shares at about five times current revenues, which is on a par with peers in the West, however Isaev points out that these companies are operating in saturated markets whereas HSCI is only just starting to develop a massive market.

The kicker to the company is that unlike its counterparts in the West, it also has three commercial products in development, based on its expertise in stem cell technologies: a gene therapy that promotes growth in the vascular system; another gene therapy that treats post-heart attack problems; and cellular treatment for rejuvenating aging skin aimed at the beauty products market. All three treatments are in the clinical trial phase now and if any of them prove to be a success, they could send the company's revenues through the roof.

Send comments to The Editor

Related Articles

Drum rolls in the great disappearing act of Russia's banks

Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more

Kremlin: No evidence in Olympic doping allegations against Russia

bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more

PROFILE: Day of reckoning comes for eccentric owner of Russian bank Uralsib

Jason Corcoran in Moscow - Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.