Way paved for JV production between Rafarma Pharma and Pharmsynthez

Rafarma Pharmaceuticals (Pinksheets: RAFA), a Russia-based multi-product pharmaceutical company and St Petersburg-based Pharmsynthez (MICEX: LIFE) have opened discussions for joint venture production.

At meetings initiated by Governor Oleg Korolev of Lipetsk, management from Rafarma and Pharmsynthez have agreed in principal to commence a JV production plan, with the potential to substantially increase revenues for both companies. The agreement is contingent on a satisfactory technical audit of Rafarma's facilities by Pharmsynthez to be conducted next month.

The JV production plan calls for various Pharmsynthez pharmaceutical products to be manufactured in Rafarma's facilities, almost doubling capacity and expanding market share accordingly. The ontological and antibiotic products to be produced currently have domestic revenues of around $250 million. While Pharmsynthez has an existing market share of about 20%, the JV production plan with Rafarma anticipates increasing market share to 35% or more.