For the sake of a dream of big business, Vikram Poonia parted ways with partners and renounced Indian citizenship. His company Pharmasynthesis became one of the largest suppliers of medicines to hospitals in Russia.
In January 1992, an 18-year-old student Vikram Punia, a native of Jaipur, flew to Irkutsk. By this time, he had studied for six months in India on a doctor, but after learning about the free exchange program for students, he went to Russia. Even the 30-degree difference in air temperature did not frighten him-in Irkutsk outside the window was minus 15, in Jaipur – a similar but plus value. “Because of the heat, I was very often sick. Physically: the temperature, something else, “- admits Poonia in an interview with RBC.
The scholarship at the Irkutsk Medical University was small, and he did not want to ask for money from his father, a large developer. The easiest way to make money was trading. Almost immediately after the move, Punia began to carry clothes and food from Moscow to Irkutsk: he sold leather goods that were then fashionable, women’s tights, tea, beer – in general, “anything,” he says. A year later, after learning the Russian language at the university, Punia transferred from the medical faculty to the pharmaceutical faculty, and changed tights and tea to medicines-he resold them to Siberia. The first $ 1 million, the businessman asserts, he has earned on deliveries of medicines to the Yakut government. Then Punia decided to start with commerce.
There is a need to produce medicines in the country, decided Poonia, and in the same year, together with partners, registered “Pharmasynthesis”. He already knew for sure that he would not return to live in India.
For 20 years, the company’s revenue increased to 8.6 billion rubles. (according to the results of 2016), the enterprise has grown to five plants. The businessman received Russian citizenship, moved to Moscow, became the sole owner of “Farmasintez” and acquired a collection of expensive sports cars.
Ruslan Polyakov, co-founder of Pharmasynthesis, recalls that he met Poonia in Irkutsk in the mid-1990s “at a family table.” Future partners brought down family ties: in 1994, Poonia married his second cousin Polyakov Irina. By the time of his acquaintance with Polyakov, the entrepreneur had already begun to build the first production pharmaceutical site in Irkutsk, in the premises of former pharmacy stores.
Poonia invited a newly-born relative, who had a building education, to “drive up and see”. Shortly after this inspection, he invited Polyakov to enter the capital of the company and take over the management of the construction of the plant. The third partner in “Farmasintez” was another resident of Irkutsk, Anil Rana (he could not talk to RBC magazine).
When Polyakov joined the project, the building of the future production had not even been repaired, “there was no documentation”: it was these issues that he tackled. Punia was responsible for marketing and supply. Partners did not think about creating a large company. “Vikram had an idea, there was a potential, a resource,” says Polyakov.
Poonia invested $ 1 million in the development of “Farmasintez”, the partners, he said, invested smaller amounts. Polyakov does not disclose a specific figure, but admits: “I had a wholesale business related to food. I gradually began to shift [the funds] into a new project. ” Also, the partners took a loan of approximately $ 2 million in Vostsibkombank at 40-50% per annum (the loan was returned in three years).
The first factory “Farmasintez” earned in 1999: businessmen established the release of generics (analogues of original branded drugs, produced under other names) of antituberculous drugs. And three years later the company decided to create its own drug, which later became known as “Perchloron”. On a joint with the Irkutsk Institute of Chemistry. A.E. Favorskogo development took ten years – Perchloron was officially registered in November 2012, soon after that he entered the list of vital and essential drugs. However, when in 2015 the Ministry of Health issued an order with recommendations for the treatment of tuberculosis, Perkhlozon was not included in this list of medicines.
In parallel with the development of its own drug, “Pharmasynthesis” registered the rights to new generics. In 2003, this function, together with sales, was transferred to a branch of the company, which opened in Moscow. Poonia started to expand its production facilities in Irkutsk, as the previous volumes ceased to exist, and also plunged into the construction of a second plant, this time in Ussuriisk.
The idea to build a plant in Primorsky Krai was born unexpectedly: in the early 2000s, at an economic forum in Vladivostok, Punia met with Governor Sergei Darkin, and he proposed to open an enterprise in the Far East. After studying the market, the managers of “Pharmasynthesis” found an unoccupied niche – the region lacked infusion solutions (such as, for example, glucose), the businessman says. In 2003, a separate company, “East-Pharm” was registered in Ussuriysk.
The idea was a success, says Punia: “In fact, today in Siberia and the Far East we are the main supplier of infusion solutions.” The revenue of “East Pharm” exceeded 100 million rubles. in 2010, and by the end of 2016 it amounted to 778 million rubles. (with a profit of 125 million rubles.), follows from the data in the database “SPARK-Interfax”.
Revenues of the parent Irkutsk company grew more slowly: while the revenue of the seaside plant increased by tens of percent, Pharmasintez fell by 7% in 2007, in 2008 it grew by only 5%. After the launch of the Ussuri factory, the company began a long period of stagnation, admitted Poonia in an interview with the Vademecum magazine.
In order to get the business out of this state, the entrepreneur decided to take drastic measures – to obtain Russian citizenship by giving up the Indian citizenship, to move to Moscow and take control of the office under his personal control. He did not like how the branch worked: registration of drugs and sales “went pretty bad, there was no discipline, there was no order,” concludes Punia.
The Moscow branch was then run by one of the partners of Pharmasintez Rana, follows from the information in SPARK-Interfax. After moving to the capital, Punia dismissed almost all the employees of the branch and recruited new ones. In addition, he decided to buy out the shares of the two partners – their views on business development differed: “I was always for investing more, working harder, earning more quickly. But they [the partners] constantly demanded dividends, “explains Punia. As follows from the annual reports of Pharmasynthesis, following the results of 2008, 85% of profit (2 million rubles) was spent on payments to shareholders, in 2009 – 90% (76 million rubles), and in a year – 22.6 % (40 million rubles.).
The second reason for the co-owners’ departure, according to Punia, is a criminal case “against unidentified persons”. There are no details of the proceedings of Poonia does not disclose: “I would not like to raise this topic and dig in the mud.” He considers the case “a fabricated attack of competitors on” Farmasintez. ” In particular, he says that during the same period he received offers to sell the business (potential buyers and the amount he does not disclose) for “kopecks, if you compare with the value of the company today.”
Get rid of the “problem” business, Punia did not, and consolidated 100% of the shares, buying from partners 36%. The businessman did not name the amount of the deal. According to the “Pharmasynthesis” report for 2008, the authorized capital of the company was 100 million rubles. Polyakov explains the way out of business with health problems: “I had a compression fracture of the spine, so it was decided to sell the share.” He also did not disclose the sum.
Partially, Punia paid off with the property and real estate partners, the businessman said. After leaving Pharmasynthesis Polyakov started real estate management: now he owns the business center Meridian in Irkutsk. Earlier, the owner of three legal entities associated with the business center and located at the same address was Punia, in February 2013 they were liquidated (data of SPARK-Interfax). Polyakov confirmed that in the development business they were also partners.
A year after the transaction, Punia dismissed the company’s board of directors, but the new structure did not appear – the entrepreneur does not see any sense in it.
“I’ll do it anyway”
In the evening of September 8, 2017, the situation at the icebreaker Angara in Irkutsk resembled the festivities on the city’s day: “Farmasintez” arranged a concert for residents and a ten-minute salute in honor of the company’s twentieth anniversary. On the occasion of the anniversary, former employees were also invited, among them Fyodor Miroshnikov: in 2008 he became general director of Pharmasynthesis, and before that he headed the Usolsky Chemical Plant for about 20 years.
“He came to visit me, he gained experience,” Miroshnikov said of his acquaintance with Punia and explains: Usolsky Chemical Pharmaceutical Plant was the largest producer of pharmaceutical substances in the Soviet Union, from which medicines are made. Having left for Moscow in 2008, Punia called an old friend to work – to lead the company in Irkutsk. “They built production, let new ones in,” Miroshnikov briefly describes his work in Pharmasynthesis. In the company he worked only a year.
Nevertheless, the experience of Usolsky Chemical Pharmaceutical Plant “Pharmasintez” was useful. Punia decided to release not only medicines, but pharmaceuticals. Since 2014, in the section “Work” in the profile of Poonia in Facebook, in addition to the post of president of “Pharmasynthesis” appeared the item “Russia’s withdrawal from dependence on the import of drugs.”
Import substitution in the country is hindered primarily by the undeveloped production of substances, the businessman is sure. In September 2017, Punia publicly invited the Ministry of Industry and Trade and the Ministry of Health to give Russian producers of pharmaceutical substitutes a 40% preference for public procurements. In return, the businessman promised to invest in the production of components 10 billion rubles., Wrote TASS.
In any case, he intends to invest these billions of dollars – regardless of whether the government agrees to approve the preferences. About the construction of the enterprise for the production of substances in Usolye-Sibirskoye (80 km from Irkutsk), the company reported a week before the public promises of Punia to the ministers. However, the concern of the businessman with state support is clear: with 40 percent preferential investment in the plant will pay off twice as fast – in four to five years, he explains. So far, the share of substances in the proceeds of “Pharmasintez” does not exceed 2%, but by 2020, Poonia wants to see the company “a supplier of raw materials for the whole world.”
In the USSR there were large manufacturers of ingredients that imported products, but cheaper Chinese raw materials came to replace them, explains the director general of the Association of Russian Pharmaceutical Manufacturers Viktor Dmitriev. Now many enterprises in China are closed, that’s why both “Pharmasintez” and other companies in Russia “regard this as an opportunity to occupy a niche,” Dmitriev believes.
More and more pharmaceutical companies are betting on the creation of new products, switching to the production of a full cycle inside the country – from the substance to the finished product – is quite logical, adds Alexander Bikov, director of economics at R-Pharm. Now, according to the expert, in Russia there are about 30 substance manufacturers, including R-Pharm, but still the existing volume is not enough. The volume of imported pharmaceutical raw materials in 2016 amounted to 50 billion rubles., Growth for the year – 6%, calculated in DSM for the magazine RBC.
While a full-scale plant for the production of substances from Pharmasynthesis exists only in plans, the company launches production lines at a new plant in Bratsk: in addition to the ingredients, the company will also produce Perchloron. Investments in the project – almost 1.4 billion rubles., According to the economic portal Bratsk.
For construction in 2015, Punia received a soft loan for 300 million rubles. from the Industrial Development Fund. And the city authorities helped in negotiations with local contractors: it was possible to bring down the cost of connecting to electricity networks and speed up the registration of land, the representative of the administration of Bratsk said.
However, Punia is going to not just take the company to the number of leaders – producers of raw materials: the businessman decided to “rethink” the essence of his business.
Poonia is not shy of personal success: he publishes on the page in Facebook photos of sports cars and luxury cars, enthusiastically tells the media how he takes them to Irkutsk and abroad and “chases”. “You can go to Moscow for six months, while the summer lasts, from May holidays to October,” the businessman rejoiced, telling in an interview with Weacom’s Irkutsk canal about his Lamborghini.
How to develop “Farmasintez”, Punia also decides in fact alone. “In any firm there is an idea generator who comes up with who understands what and why. In my company, of course, such strategic decisions are still made by me personally, “the businessman admits. While he generates new ideas, the production of new generics has been the main source of development of “Pharmasynthesis” for decades. Since 2012, revenue shows double-digit growth, and net profit in 2016 for the first time exceeded 1 billion rubles. (three times more than a year earlier).
The company earns primarily on the sale of medicines to hospitals: “Pharmasynthesis” by the end of the year was the sixth largest supplier of medicines in this segment, taking 3.2% of the market, follows from the report of the DSM. And in the rating in addition to the company Poonia there is only one Russian producer – “Biocad” (share 2.7%).
Both companies were helped in the rating by the import substitution policy, explained in the DSM: in 2015 the government approved the restriction of state purchases of imported medicines, and the approved state program “Pharma-2020” is aimed at replacing foreign expensive drugs. As a result, for example, antiretroviral “Keremuvir” from “Farmasintez” replaced “Presista” from Johnson & Johnson, the domestic medicine was on the tenth place in the rating of brands for purchases (DSM estimates the volume of 1.7 billion rubles.).
Dmitriev agrees: import substitution prompted the growth of “Pharmasynthesis”. However, expansion of the portfolio was also an important factor: for a long time anti-tuberculosis drugs were the main focus of Punia company, and then “Pharmasynthesis” began to produce more different drugs, and in an expensive segment, from Indian substances, the expert explains.
Over the past three years, the company has just three new plants – it also contributes to growth, adds Dmitriev. So, in 2015, Punia purchased the YugraPharm enterprise in Tyumen for 500 million rubles. (another 5 billion rubles will be invested in the development) and has established the production of drugs for diabetes, and in 2017 for 2 billion rubles. opened the production of cytostatics (antitumor drugs) in St. Petersburg and the plant in Bratsk.
“My main dream is the development of innovative drugs,” says Poonia. While about 95% of names in the portfolio of “Pharmasynthesis” – generics. From the “innovative” is still only Perkhlozon. But the entrepreneur, he claims, actively invests in his own development. Now in the stage of clinical trials is a drug designed for the prevention and treatment of adhesions (fusion of neighboring organs). If it is possible to prove its effectiveness, the medicine will be on sale in Russia in 2019, then Punia plans to export it abroad: investments will exceed $ 100 million, taking into account spending for registration of the drug in the US and Europe.
Punia is sure: there is no other choice but to turn to own medicines. The release of new generics “will not give us eternal growth”, “sooner or later other products will appear on the market,” he explains. And the growth rate of Pharmasintez revenue is slowing down: if in 2014 this indicator jumped by 94%, then in 2016 the dynamics made 36%.
According to the businessman’s forecast, the company will be able to grow on the old model for another two to three years, and then everything will depend on what innovative preparations Pharmasynthesis will introduce into the market.
“If we prove our effectiveness, our hypothesis, then … You know how the phone was Nokia, with the advent of smartphones Apple and Samsung Nokia disappeared. All the old will disappear with the advent of our drug, “- confidently states Punia. The first $ 1 billion “Farmasintez”, according to the idea of the founder, will bring to 2022.
Author: Elizabeth Arkhangelskaya
Article in Russian: RBC Magazine