You're reading: German drug maker Stada enters Ukraine, buys giant Biopharma

The German drug manufacturer Stada Group has acquired the prescription and consumer health business of one of Ukraine’s largest pharmaceutical companies, Biopharma, the companies announced on Dec.2.

The agreement, the value of which has not been disclosed yet, is expected to be closed by the end of 2019.

“With this acquisition, we will become an important player in the Ukrainian pharma market with a strong local production footprint,” Stada CEO Peter Goldschmidt said in the company’s statement published on Dec. 2.

Stada, a Frankfurt Stock Exchange-listed company, is based in the German city of Bad Vilbel and employs around 10,000 workers worldwide. Today the pharma giant, whose main shareholder has been the American Bain Capital investment company since 2017, is pursuing the goal to expand across Europe.

“This is the first strategic investment in the pharmaceutical industry in Ukraine’s entire history and the first European investment since 2014 into Ukrainian economy,” Biopharma head Kostyantyn Yefymenko wrote on his Facebook page.

While selling its prescription pill business, Biopharma will keep the company’s plasma processing business, which includes the company’s recently launched, $75 million plasma fractionation plant in the city of Bila Tserkva in Kyiv Oblast, the only biopharmaceutical plant of its kind in Eastern Europe.

In fact, Biopharma shareholders plan to work on expanding these activities domestically and abroad.

The plant is vital for Ukraine as it processes plasma for cancer patients, pregnant women and patients with hemophilia, a rare blood disorder.

“We, together with our partners, will focus all our efforts and resources on the development of the Biopharma’s plasma business,” said Yefymenko, whose managing partner is Vasyl Khmelnytsky, the Ukrainian tycoon and founder of UFuture Investment Group.

Currently, the 123-year-old giant produces nearly 20 million packs of drugs per year and employs around 500 people, 300 of which are about to start working for the German company.

A Biopharma employee checks the drug manufacturing process at the company’s pharmaceutical plant in Kyiv Oblast. (Courtesy of Biopharma)

According to Lenna Koszarny, founding partner and chief executive of Kyiv-based Horizon Capital, a private equity firm that invested in the Bila Tserkva plant, Stada’s acquisition of Biopharma will be an entry for the company to expand its business in Ukraine.

“We welcome Stada’s acquisition of Biopharma’s pharmaceutical business and their decision to invest and produce in Ukraine,” she said.

In Ukraine, Stada’s business will be headed by Borys Labensky, a newly appointed general manager. According to the company’s website, Labensky’s goal is to integrate the businesses quickly and leverage the capacity of the acquired production plant.

Ukraine’s Prime Minister Oleksiy Honcharuk praised the agreement, saying that all Ukrainians will win from it.

“These will mean new working places, taxes into the Ukrainian budget, and increased confidence from the international business community,” Honcharuk wrote on Facebook on Dec. 2.

Meanwhile, Yuliya Kovaliv, deputy head of the office of the President of Ukraine, said such investments mean not only new jobs and additional revenue for the economy but also access to better technology, research and development centers and new export markets.