Billionaire Abramovich’s Millhouse, Pharmstandard to Buy Biocad

May 22, 2014 12:00 am ET

May 22 (Bloomberg) -- 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 plans to purchase 50 percent of Biocad while Pharmstandard is set to buy 20 percent, according to a press release that was obtained by Bloomberg News ahead of its public distribution. Biocad Chief Executive Officer Dmitry Morozov will hold the remaining 30 percent and continue to lead the St. Petersburg-based company, which he founded in 2001. Financial terms of the transaction weren’t disclosed.

The deal comes amid scrutiny about whether investors are still seeking Russian assets after President Vladimir Putin’s incursion into Crimea triggered a selloff in the country’s markets. Closely held Biocad had been valued at as much as $1 billion, a person with knowledge of the matter said last June, when a sale process was said to have drawn interest from U.S. drugmakers Pfizer Inc. and Amgen Inc.

Pharmstandard sees the acquisition as a “strategic” investment, CEO Igor Krylov said in the statement. The Moscow- based company said it will finance the deal with its own funds. Millhouse and Pharmstandard had previously cooperated on acquisitions of ICN Pharmaceuticals Inc., ZAO Masterlek and on Pharmstandard’s initial public offering, according to the statement.

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

Gains Biosimilars

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’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.

OAO 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. 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.

Pharmstandard’s head of investor relations, Irina Bakhturina, declined to comment by phone. John Mann, a spokesman for Millhouse, declined to comment by text message. Biocad’s press service didn’t respond to e-mails and a phone call requesting comment after Moscow business hours. Gazprombank’s press service didn’t respond to comment requests.

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.