Pharmstandard, the Russian generic drugmaker that is jointly owned by Roman Abramovich, announced plans this morning to float a stake of up to 40 per cent on the London and Moscow stock markets to raise money for acquisitions and research into new products.

Analysts said the company could be worth between $1.4 billion (£709 million) and $1.7 billion, based on current market multiples.

The listing would make Pharmstandard, which describes itself as Russia’s leading domestic drugs company and the fourth-largest operating in the country by sales volume, the second Russian pharmaceuticals firm to list abroad after its rival Veropharm, which raised £140 million when it floated in April 2005.

Igor Krylov, the general director of Pharmstandard, said in a statement: “Our goal is to strengthen further our position as the leading domestic pharmaceutical company in Russia and become one of the top three pharmaceutical companies operating in Russia overall."

He added that Pharmstandard would continue a strategy of “promoting our market-leading brands, launching new products, increasing investment in sales and marketing and selectively acquiring additional companies”.

However, the company declined to say how much it planned to raise.

Olga Leschankaya, a spokeswoman, told Times Online: "It's too early at this stage of the process. It's up to the market to decided on our valuation."

The float would be of existing shares belonging to the company’s owners — Viktor Kharitonin, Yegor Kulkov and Millhouse Capital, Roman Abramovich's investment vehicle.

“It is a pure secondary offering — our owners have decided to monetise their investments made several years ago,” Ms Leschankaya said.

She added that the listing would enable Pharmstandard to make acquisitions in the future, as well as to benefit from an "international level of governance".

"We would have a lot of benefits being a public company because it would be much more simple for us to attract people to work for our company and attract money in case we would like to invest in some acquisitions or developing new products," she said.

The offering will be both of global depositary receipts in London and ordinary shares on the MICEX and RTS exchanges in London.

Pharmstandard had previously postponed its stock offering amid discussions about whether it should issue any new shares to raise funds to invest in the business.

The company also announced today that its sales in 2006 rose 50 per cent to 8.52 billion roubles (£170 million), while earnings attributable to shareholders rose 109 percent to 1.9 billion roubles.

In addition to generics, Pharmstandard also produces branded products including the antiviral drug Arbidol, which it said was the largest-selling pharmaceutical product on the commercial sector of the Russian market, according to market research.

The Russian pharmaceuticals market was worth an estimated $8.4 billion in 2005.

It is expected to reach $15 billion to $17 billion in sales by 2010.

Pharmstandard has hired Citigroup and UBS as joint global co-ordinators and bookrunners of the offering.

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