Sharapova Doping No Boost for Latvian Drugmaker, Swedbank Says

Photographer: Ture Lillegraven/Bloomberg Pursuits
  • Grindeks' shares trading near lowest level since 2009
  • Company's sales in Russian market dropped 51% last year

Latvian pharmaceutical company Grindeks AS traded near a six-year low as investors speculated the publicity surrounding tennis star Maria Sharapova’s admission she used its banned Mildronate brand won’t offset slumping sales in Russia.

The stock dropped 0.6 percent on Tuesday to 4.92 euros in Riga trading, close to a more than six-year low reached at the start of the month, before Sharapova’s admission. That valued the company at 47.2 million euros ($52.4 million). Swedbank AS, the biggest bank in the Baltic nation, cut the stock to sell on March 2 and lowered its price target to 4 euros from 5 euros.

While the product isn’t approved for use in the U.S. or in the U.K., Grindeks said the drug test had led to increased attention from countries around the world. That’s not enough to deflect the pain of a weaker ruble in Russia, where sales fell 51 percent last year, according to Swedbank. 

Grindeks needs to “find new markets and reduce its cost base,” Andrej Rodionov, an analyst at Swedbank AS, said Tuesday. “It wasn’t a secret that a lot of non-professional athletes take Mildronate, so I don’t think this latest publicity is going to significantly increase their niche.”

Sharapova, who has been the highest paid female athlete in the world for more than a decade, is the most famous of a growing number of athletes who have failed tests for using Grindeks’ drug, or similar products, since it was banned in January by the World Anti-Doping Agency.

Mildronate “is widely used for the treatment of different heart and vascular diseases, as well as for the improvement of work capacity of healthy people at physical and mental overloads and during rehabilitation period,” according to the company’s website.

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