RDIF and Sistema announce the creation and joint development of Binnopharm Group

Press release, 19.02.2021

One of Russia’s leading pharmaceutical holdings is created on the basis of JSC Alium and OJSC Sintez

Moscow, February 19, 2021 – A consortium of investors including the Russian Direct Investment Fund (RDIF, Russia’s sovereign wealth fund), the Russia-China Investment Fund (RCIF, established by RDIF and China Investment Corporation), the leading investment funds of the Middle East, as well as Sistema PJSFC, a publicly-traded Russian investment company, and VTB Group announce completion of the establishment of the pharmaceutical holding company Binnopharm Group.

The holding will become one of the three largest pharmaceutical manufacturers in Russia as part of a long-term strategy to consolidate Russian pharmaceutical market and create a leading producer of medicines and innovative pharmaceuticals.

The Consortium formed by RDIF as well as Sistema PJSFC and VTB Group contributed an 85.6% stake in JSC Alium (which includes JSC Binnopharm) to the equity of Binnopharm Group. At the same time Sistema and VTB contributed their 56.2% stake in OJSC Sintez (which includes CJSC Biocom) to the equity of Binnopharm Group. As a result, the effective stake of Sistema together with VTB in Binnopharm Group will be 79%, and the Consortium will have 15.8%. The remaining 5.2% of shares are distributed among individual minority shareholders.

Kirill Dmitriev, CEO of the Russian Direct Investment Fund, said:

“The creation of one of the leading diversified pharmaceutical holdings will allow the development and production of high quality and innovative medicines to increase the wellbeing and life expectancy of the Russian population. One example of such an approach was the start of production of the Sputnik V vaccine against the coronavirus infection at the Binnopharm plant in Zelenograd. The participation of RDIF’s foreign partners in the consolidation project confirmed their interest in investing in the Russian pharmaceutical and healthcare sectors, their readiness to work together with RDIF on the implementation of national projects, as well as on the further development of the Binnopharm group, including its initial public offering in the future.”

Vladimir Chirakhov, President of Sistema, said:

“Consolidation of pharmaceutical assets on the basis of Binnopharm Group is an important step towards transforming the holding into a leader on the Russian pharmaceutical market, with a diversified product portfolio, experienced management, and significant production and research potential. Binnopharm Group companies are already demonstrating impressive performance: in 2020, sales grew by 25% year-on-year to RUB 27.5 bn. Consolidation of assets into a single holding company will support further growth of the business and add shareholder value, including by achieving synergies from the merger, optimisation of marketing and promotion costs, reduction in administrative costs, and expansion of the geographic coverage of sales. We are pleased that our strategy for the development of the pharmaceutical business met with the approval of our partners and they supported the establishment of a single pharmaceutical holding company.”

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Russian Direct Investment Fund (RDIF) is Russia's sovereign wealth fund established in 2011 to make equity co-investments, primarily in Russia, alongside reputable international financial and strategic investors. RDIF acts as a catalyst for direct investment in the Russian economy. RDIF’s management company is based in Moscow. Currently, RDIF has experience of the successful joint implementation of more than 80 projects with foreign partners totaling more than RUB2 tn and covering 95% of the regions of the Russian Federation. RDIF portfolio companies employ more than 800,000 people and generate revenues which equate to more than 6% of Russia’s GDP. RDIF has established joint strategic partnerships with leading international co-investors from more than 18 countries that total more than $40 bn. Further information can be found at www.rdif.ru

Binnopharm Group is a full-cycle Russian pharmaceutical holding company that combines five production sites located in different regions of Russia: JSC Alium (formerly OBL Pharm in the Serpukhov district of the Moscow region), JSC Binnopharm (two sites: Zelenograd and Krasnogorsk), JSC Sintez (Kurgan) and JSC Biocom (Stavropol). Binnopharm Group companies produce a wide range of drugs across various therapeutic areas and collectively have the largest portfolio of drugs among Russian manufacturers (more than 450 registered products, including the COVID-19 vaccine Sputnik V). Binnopharm Group's Chief Executive Officer is Rustem Muratov.

Sistema PJSFC is a publicly-traded Russian investment company with a diversified portfolio of assets serving over 150 million customers in the sectors of telecommunications, technology, financial services, retail, timber processing, agriculture, real estate, e-commerce, hospitality and healthcare. The company was founded in 1993. Its revenue in 2019 reached RUB 656.9bn; its total assets equalled RUB 1.3tn as of 31 December 2019. Sistema's global depositary receipts are listed under the “SSA” ticker on the London Stock Exchange. Sistema’s ordinary shares are listed under the “AFKS” ticker on the Moscow Exchange. Website: www.sistema.com

For additional information contact:

Alexey Urazov                                                 Andrew Leach / Maria Shiryaevskaya
Russian Direct Investment Fund                                 Hudson Sandler
Director for External Communications               Tel: +44 (0) 20 7796 4133 
Mobile: +7 915 312 76 65                         
E-mail: Alexey.Urazov@rdif.ru