OREANDA-NEWS. April 14, 2010. Pharmstandard purchased an 11.3% stake in the Latvian pharma producer Grindeks, which owns the drug Mildronat. Pharmstandard has exclusivity for this drug in Russia, which accounted for 5.1% of Pharmstandard’s revenues in 2009. Neither the price, nor the valuation, was disclosed. Grindeks has a market cap of USD 98m, which implies that Pharmsandard paid approximately USD 11m for the stake.

View: Overall news is marginally positive - in line with Pharmsandard acquisition strategy. Given the importance of Mildronat for Pharmstandard, we welcome the move.

Valuation & Action: Pharmstandard trades on a 2010E EV/EBITDA of 10.5x, which is a 33% discount to EM peers and a 32% premium to DM peers. The company also trades in line with its Central European peer, Gedeon Richter.