- In spring 2013, Germany's Fresenius announced that it would enter a partnership with Binnopharm, a subsidiary of the Russian pharma company Sistema JSFC, to increase its business in that region. Last year, Binnopharm did $104 million in business.
- The deal was supposed to be structured so that Fresenius would own 51%, Russia's Zenitco Finance Management would own a minority stake, and Sistema would own the rest.
- Last week, Fresenius announced that the three stakeholders have mutually agreed to terminate the partnership, FiercePharma reports.
Fresenius has been doing business in Russia for the last 20 years and had plans to expand its business by forming a joint venture with Binnopharm, which has two manufacturing facilities that make IV drugs, infusion solutions, and active pharmaceutical ingredients.
But it turns out that 20-year relationship is being strained over Russia's annexation of the Ukraine's Crimean peninsula, and the country's continued involvement in eastern Ukraine is proving to be a deal-breaker.
Pharma companies have shown interest in getting involved in the Russian market, with firms such as Abbott Labs and Novartis making key investments in the region. Nonetheless, some companies doing business in the area, including Hungary's Gedeon Richter, have reported substantially lower revenues over the last several quarters.