Stada Falls on Concern Crimea Conflict May Hurt Sales

Stada Arzneimittel AG (SAZ), Germany’s biggest maker of generic drugs, fell the most in more than three months in Frankfurt trading on concern that the conflict between Russia and Ukraine will crimp revenue.

Russia accounted for 19 percent of Stada’s sales in 2012, while Ukraine contributed another 1.7 percent. The Bad Vilbel, Germany-based company highlighted Russian growth when it reported 2012 earnings last year.

“It’s difficult to assess the potential repercussions, and the company certainly has a high exposure to Russia,” Ulrich Huwald, an analyst at Warburg Research GmbH, said by phone.

U.S. Secretary of State John Kerry is traveling to Ukraine today as western leaders seek to respond to Russia seizing control of the eastern European country’s Black Sea region of Crimea. Ukraine yesterday mobilized its army and called for foreign observers as gunmen surrounded military installations in Crimea a day after Russian President Vladimir Putin got lawmakers to rubber-stamp troop deployments.

Investors should avoid Stada if the conflict becomes more intense, Commerzbank AG analysts said in a report today. Sales in Russia rose 23 percent to 343 million euros ($472 million) in 2012, the company said last year. Stada reports 2013 earnings on March 27.

Stada declined 6.1 percent to 34.99 euros at 10:53 a.m. in Frankfurt. The stock sank as much as 8.4 percent, the biggest intraday decline since Nov. 13. A spokesman for Stada didn’t immediately return a call seeking comment.

Booming Times

Investments in Russia by drug companies boomed in 2011 after the government pushed for a greater share of the country’s medicines to be produced locally. Russia’s pharmaceutical market totaled about $25 billion in 2012, according to a report by DSM Group, a market research firm in Moscow.

Novartis AG (NOVN) in 2011 began construction of a manufacturing plant in St. Petersburg as part of a five-year, $500 million investment in the country. AstraZeneca Plc (AZN) the same year began building a $150 million manufacturing facility in the Kaluga region, and has formed several partnerships with Russian development institutes. Teva Pharmaceutical Industries Ltd. in 2011 said it would invest at least $50 million in a production facility in Yaroslavl, Russia.

To contact the reporters on this story: Naomi Kresge in Berlin at; David Wainer in Tel Aviv at

To contact the editor responsible for this story: Phil Serafino at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.