Abramovich’s Millhouse, Pharmstandard to Buy Biocad

Millhouse LLC, billionaire Roman Abramovich’s investment company, and OAO Pharmstandard, Russia’s biggest drugmaker, plan to buy Biocad, a biotechnology firm.

An affiliate of Millhouse will purchase 50 percent of Biocad while Pharmstandard is set to buy 20 percent, the companies said in a joint statement today. Biocad Chief Executive Officer Dmitry Morozov will hold 30 percent and continue to lead the St. Petersburg-based company, which he founded in 2001. Financial terms of the transaction weren’t disclosed.

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The deal comes amid scrutiny about whether investors are still seeking Russian assets after President Vladimir Putin’s incursion into Crimea triggered a sell-off in the country’s markets. Last year, closely held Biocad attracted interest from U.S. drugmakers Pfizer Inc. and Amgen Inc., a person with knowledge of the matter said in June.

Pharmstandard shares rose as much as 7 percent in London trading to 9,285 pence, the highest intraday price since March 25. The company sees the acquisition as a “strategic” investment, CEO Igor Krylov said in the statement.

Millhouse plans to buy its stake from OAO Gazprombank, Russia’s third-largest lender, according to John Mann, a spokesman for the investment company. Gazprombank acquired a controlling stake in Biocad in a 2011 deal that valued the company at $250 million to $300 million, according to Russian newspaper Vedomosti.

Previous Cooperation

Pharmstandard said it will finance the deal with its own funds. Irina Bakhturina, the company’s head of investor relations, said it isn’t buying a stake from Gazprombank, declining to provide further details of the transaction. Millhouse and Pharmstandard have cooperated on acquisitions of ICN Pharmaceuticals Inc., ZAO Masterlek and on Pharmstandard’s initial public offering.

Millhouse’s purchase is subject to regulatory approval, according to the statement.

Biocad will give Pharmstandard a pipeline of biosimilars, which are cheaper versions of brand-name biotechnology drugs that have lost patent protection. The company is recruiting patients for studies of copies of Roche Holding AG (ROG)’s three biggest-selling drugs, the cancer and rheumatoid arthritis medicines Rituxan, Herceptin and Avastin, according to clinicaltrials.gov. It lists 11 active or completed patient studies on the U.S. website that tracks clinical trials.

Pharmstandard was formed in 2003, when Abramovich’s Millhouse and Pharmstandard’s Chairman Viktor Kharitonin bought Russian assets belonging to ICN Pharmaceuticals for about $55 million.

Neither Biocad nor Gazprombank’s press service responded to requests for comment.

Biocad also makes cancer chemotherapies, a drug to fight genital infections and three medicines to treat viral infections, according to its website. In addition, it sells a copy of a multiple sclerosis medicine.

To contact the reporters on this story: Irina Reznik in Moscow at ireznik@bloomberg.net; Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editors responsible for this story: Wojciech Moskwa at wmoskwa@bloomberg.net James Callan, Thomas Mulier

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