OREANDA-NEWS. September 13, 2010. At Pharmstandard's Analyst Day management gave an update on the company’s operational and financial performance, and provided guidelines on company strategy. The main takeaways from the meeting are as follows, reported the press-centre of OTKRITIE Financial Corporation:

In 8M10 Pharmstandard saw 25% YoY revenue growth, including 20% YoY organic growth, a notable improvement over 1H10 figures. Growth was driven by Rastan (HGH) and Coagil (IV blood factor), and a rise in purchases from wholesalers

This year the company plans to spend about RUB500m on organic capex and RUB480m on the Generium project, a large-scale biotechnological project

Pharmstandard will fund the production of generic analogs for import drugs bought by the state through tendered auction

The company has registered 86 drugs on the federal vital and essential drugs (VED) list, which come under the new law regulating price. These VED drugs account for about 52% of the company’s sales

View: 2Q saw changes in consumption with growth driven by volumes and stable prices, trends we see continuing in 3Q. Also, given long-term implications from new regulations we think that in order to get 15% preference for government tenders for some of the 3rd party products, Pharmstandard might look to JVs with foreign partners to launch production in Russia. Overall, revenue growth will likely accelerate in 3Q10, while gross margin is unlikely to fall below 1H10 levels.

Valuation and Action: The stock trades on a 2011 EV/EBITDA of 9.4x, a 27% discount to EM peers.