Moscow, February 13, 2013 - OJSC Pharmstandard (LSE: PHST IL, RTS: PHST RU) announces unaudited consolidated sales results for 2012 in compliance with IFRS.

2012 highlights:

· In 2012 OJSC Pharmstandard (further “Pharmstandard” or the “Company”) sales amounted to RUR51391.3m with the increase of 20.5% (RUR8735.7m) compared to RUR42655.5m in 2011[1]

· At year-end 2012 Arbidol®, the anti-viral medication, a leader of the consolidated anti-flu market, retained its #1 position on the market despite the decrease in sales in the first half of 2012. Main growth drivers for Arbidol® in the second half of 2012 were the preparation for epidemiological season and the launch of preventive measures as well as active marketing and promotion strategy of anti-viral medications. Arbidol® 2012 sales amounted to RUR3975m (24974 ths packages)

· On June 1, 2012, pharmaceuticals with low content of codeine were shifted to the Rx category. The Company managed to convert their leading brands Pentalgin®and Codelac® into codeine-free analogues with minimal losses – less than 8.6% in RUR terms. 2012 sales of codeine-free Pentalgin® and Codelac® forms amounted to RUR1730m and RUR311m respectively

· In 2012 the Company released 8 new products. 2012 sales of new products added up to RUR87m

· 2012 Rx sales increased significantly by 32.5% or RUR1389.6m YoY

2012 developments:

· On June 26, 2012 the Company announced the acquisition of a controlling stake (50.005%) in Bigpearl Trading Limited (Cyprus). This deal enabled Pharmstandard to determine general terms of business activity for OJSC Biomed named after I.I. Mechnikov, Pharmapark LLC and other commercial entities comprising Bigpearl Trading Limited group. 2012 sales of OJSC Biomed named after I.I. Mechnikov and Pharmapark LLC amounted to RUR311.8m and RUR892.6m respectively. The revenue of the Company is consolidated into financial reporting of Pharmstandard as of the date of closing

· On November 21, 2012 OJSC Pharmstandard acquired 100% of LEKKO CJSC shares. 2012 sales of LEKKO CJSC in compliance with RAS amounted to RUR447.4m. The revenue of LEKKO CJSC is consolidated into financial reporting of Pharmstandard as of the date of closing

Pharmaceutical market – 2012 highlights

· The size of the Russian pharmaceutical market in 2012 is estimated at RUR818bn with a 16.5% increase YoY[2]

· The commercial segment of the pharmaceutical market in Russia grew by 23% from RUR488bn in 2011 to RUR600bn in 2012[3]. According to 2012 sales Pharmstandard share in the commercial segment of the market is 4.2%. The Company is among three largest pharmaceutical companies operating in Russia[4]

· On December 27, 2012 the Government adopted the “2025 Strategy of drug provision to the population”. “The prior goal of the strategy is to increase the availability of high quality, efficient and safe medical products to meet the needs of population and healthcare system by developing efficient and balanced system of drug provision in Russia”- announced the Ministry of Health in its’ statement on the official website. The strategy stipulates on the development of three pilot models of drug provision at the moment of outpatient care during 2013 which subsequently, in 2015 and 2016, are to be tested in 4-6 regions of Russia. As a result, the most efficient model for the whole territory of the country will be chosen

· Vladimir Putin, the president of Russia, gave an order to change the structure of VEP list by increasing the proportion of domestic products within several years: this proportion should reach 90%. As of 2012 it includes 567 INNs or 5600 brands of medical products, among which 16.4% are local products, 36.5% - imported products, 47.1% - both local and imported

Pharmstandard sales results[5] 

2012 sales of pharmaceutical products increased by 17.7% (RUR7397.9m) and amounted to RUR49289.8m compared to RUR41891.9m for the same period in the previous year. 2012 sales structure is split into organic sales - 39.8% (RUR20462.6m), third party products (further “TPP”) sales - 55% (RUR28279.1m), sales of medical equipment 2.6% and 1.1% (RUR548.1m) - sales of active pharmaceutical ingredients (further “API”).

In 2012the Company’s organic[6] sales increased by 3.5% (RUR686.1m) and amounted to RUR20462.6m. In the structure of organic sales 72% (RUR14793.6m) account for sales of OTC products and 28% (RUR5669m) - for sales of Rx products.

2012 organic OTC salesdecreased by 4.5% (RUR703.5m) and amounted to RUR14793.6m compared to RUR15497m for the same period of the year before. 4Q2012 OTÑsales increased by 9.9%. The main cause of the decrease were the sales of Arbidolâ in 1Q2012 (RUR-1094m) due to the absence of a flu pandemic in Russia and to availability of sufficient stockpiles of the product at distributors’ warehouses to meet the current level of consumer demand. As a result, the orders for pharmaceutical products from distributors significantly decreased. In 2012 the Company launched 6 new OTC products: Nextâ, Maxicoldâ (pills), Cyclovita®, Neosmektin® (powder, new taste), Codelac® Neo (drops), Codelac® Neo (sirup) and Bromgeksin (alcohol-free syrup). The aggregate sales of new products amounted to RUR70.3m.

Arbidol®

2012 sales of Arbidol® amounted to RUR3975m that is in line with 2011 sales with amount of RUR4011m. Arbidol® 4Q2012 sales increased by 47.9% in monetary terms YoY. Arbidol® share on the market of anti-flu products is 17%, which allows it to retain its constant leading position.

2012 organic sales of Rx products increased by 32.5% (RUR1389.6m) YoY and amounted to RUR5669m.

The sales of 3 products ranked among the Company’s TOP-10 Rx drugs showed a significant increase versus market trends changing more than 25% YoY. Phosphogliv® sales increased by 26% versus 18% growth of hepatoprotectors and lipotropes market, Combilipen® sales increased by 32% versus 24.3% growth of the market of Vitamin B1 and its combinations, Biosulin® sales increased by 27% versus a 5.5% decrease of insulin and analogue market. The Company launched 2 new Rx products in 2012: Acorta® (Rosuvastatin) and Glimeperid® (diabetes treatment) (4 mg pills). Total sales of new Rx products amounted to RUR16.6m.

Pentalgin®, Codelac® and Terpincod®

Under RF Government Decree N599 dd July 20, 2011, the distribution of pharmaceuticals products with small amounts of codeine requires a doctor’s prescription as of June 1, 2012. As a result, 2012 sales of Pentalgin®, Terpincodum®, Codelac® with small amounts of codeine have moved to the Rx analytical segment starting June 1, 2012. 2012 sales of codeine-free forms of Pentalgin® and Codelac® remained in the OTC segment of sales. Since the moment of the legal restrictions on codeine the market of analgesics has decreased by 4% in RUR terms due to the decrease in codeine analgesics proportion.

Pentalgin®

As of June 2012 Pentalgin® saleshave increased by 0.6% in monetary terms. Pentalgin® was released in a new “double” package #24 that facilitated the increase in sales. In December this pack accounted for 25% of Pentalgin® sales. 2012 sales of the consolidated brand Pentalgin®increased by 2% in monetary terms. Thus we can note 100% conversion of Pentalgin®with codeine into a codeine-free form.

Codelac®

2012 sales of Codelac®decreased by 31% in terms of packages and 37% in RUR. It can be explained by the fact that new codeine-free Codelac®Bronho, notwithstanding a significant increase in 2012 sales for 2012 (146% in RUR) compared to 2011, covers only one segment of anti-cough products market – treatment of productive cough. In 4Q2012 Pharmstandard released two new forms of Codelac® - Codelac® Neo drops and Codelac® Neo sórup designed to treat non-productive cough. Thus we expect further increase in sales of Codelac® brand and its strengthening on the market.

2012 aggregate sales of Pentalgin® and Codelac®related to both OTC and Rx categories amounted to RUR2967.2m with a 8.6% decrease compared to RUR3247.3m for the previous year.

Terpincodum®

Terpincodum® was completely shifted to the Rx section; 2012 sales decreased by 70% and amounted to RUR364.2m compared to RUR1207.1m for the previous year. The Company announced earlier that they were not going to release an alternative form of the product and planned to make up for the losses by introducing new products and increasing the sales of the current product portfolio comprising of more than 250 products. The deviation of total sales of three brands is mainly explained by the decrease in sales ofTerpincodum®.  

2012 TTP sales increased by 30.2% and amounted to RUR28279.1m with the increase of RUR6553.1m YoY. 4Q2012 sales also increased markedly by 24.5% compared to the same period of the previous year and amounted to RUR12437.4 million.

Significant increase in TTP sales is driven by considerable increase in state purchases

Production localization. 7 nosologies federal program.

Within the framework of 7 nosologies program the Company manufactures products for state purchases through auctions. In 2012 this segment of Company’s TPP business increased by 30% and constituted 78.5% of the aggregate 2012FY TPP sales. Velcade®(98.7%) and Prezista® (46.9%) produced with Johnson & Johnson turned out to be the main drivers of growth.

Commerce

In the TPP segment the Company also produces and distributes products on the commercial market. The leaders of this segment are Reduksin® and Mildronate® drugs. 2012 Reduksin sales increased by 88%. The whole commercial segment of TPP increased by 19% and constituted 21.9% of aggregate 2012FY TPP sales.

2012 medical equipment sales increased by74.1% (RUR566.1m) and amounted to RUR1329.7m compared to RUR763.6m for the previous year. The increase in medical equipment segment was driven by a line extension range and increase participation in tenders through Pharmstandard-Medtechnika LLC. 

VEP (vital and essential pharmaceuticals)

The number of products in Company’s VEP segment in 2012 amounts to 241 (including all forms and dosages): 72 OTC products and 169 Rx products.

2012 VEP sales increased by 22.9% compared with 2011 numbers and amounted to RUR32711.7m. In 2012 the share of VEP sales in aggregate sales of Pharmstandard constitutes 64.6% .

Dmitry Medvedev, the Prime Minister of Russian Federation approved the list of VEPs for 2013. According to the document the list of VEPs is not subject to alteration and it is to comprise the same products as in 2012.

The joint Order # 400n/663-àissued by the Ministry of Health of Russia together with the Federal Tariff Service of Russia dd October 8, 2012 amends the Methodology of setting limit retail prices of pharmaceuticals included in the VEP list. This Methodology was previously approved by order #961n/527-àissued by the Ministry of Public Health and Social Development of Russia and Federal Tariff Service of Russia on November 3, 2010.

Amendments to the Methodology split the processes of re-registration and registration of limit retail prices and were adopted to enable Russian producers to re-register previously registered limit retail prices. In January 2013 Pharmstandard submitted the documents to re-register prices of VEPs. In February 2013 Federal Tariff Service of Russia approved the sets of document submitted by Pharmstandard-Leksredstva JSC and Pharmstandard-UfaVITA JSC for the re-registration of limit retail prices of VEPs. It is expected that the prices are to be increased by 5.5% i.e. to be adjusted for expected inflation rate

Export sales

2012 export sales increased by 41.1% and amounted to RUR1 320.9m compared with RUR935.9m in 2011.

The share of top-10 exported products constitutes 80.8% of Company’s revenue from export. The list of 10 top exported products includes Arbidol®, Mabthera ®, Phosphogliv®, Afobazol®, Pentalgin®, Ingalipt®, Cocarboxylases hydrochloride, Complivit®, Activated carbon, Codelac®.

The Company exports their pharmaceutical products to 16 countries, mainly in CIS and other neighbouring countries: Ukraine – 48.9%, Uzbekistan – 30%, Belarus – 6.4%. 2012 sales of exported pharmaceutical products constitute 2.6% of aggregate 2012FY sales of the Company.

The roadmap of the Company stipulates dynamic development and expansion of export business in Ukraine, in Latin and South America countries (Venezuela, Argentina, Nicaragua), in African countries (Nigeria, Egypt), in Middle East countries (Iran, Iraq, Afghanistan, UAE)

Pharmstandard 4Q2012 ans FY2012 sales structure

Pharmstandard Full Year 2012 Sales Update Conference Call

Moscow, 13^th February 2012 – OJSC Pharmstandard (LSE: PHST LI, RTS: PHST RU) is pleased to invite the investment community to 2012 full year sales results conference call with the management of the Company.

The conference call is followed by Q&A session. The Company’s press release will be available on the corporate website (www.pharmstd.ru) starting 11:00 AM Moscow time.

Wednesday, February 13, 2013

09:00 New York

14:00 London

18:00 Moscow

Conference call participants can register in advance using the link below:

https://eventreg2.conferencing.com/webportal3/reg.html?Acc=515384&Conf=210257
We recommend that participants start dialing in 5-10 minutes prior to ensure a timely start to the conference call.

Pharmstandard will be represented by:

Igor Krylov, CEO

Elena Arkhangelskaya, CFO

Irina Bakhturina, IR

Conference call presentation will be available on Wednesday, February 13, 2013 on Company's web-site:

https://pharmstd.com/

The conference call replay will be available through February 20, 2013

International Replay Number: +44 (0) 20 7031 4064

US Replay Number: +1 954 334 0342

Replay Access Code: 928972

International Call-in Number: +44 (0)20 7162 0125

US Call-in Number: +1 334 323 6203

Conference ID: 928972
Contacts:

Irina Bakhturina.

Investor Relations

Pharmstandard OJSC

Tel.: +7 (495) 970-0030 Ext.2824

E-mail: ir@pharmstd.ru

www.pharmstd.com

About Pharmstandard:

Pharmstandard OJSC (www.pharmstd.com) – Russia’s leading pharmaceutical Company that develops and manufactures high-quality modern pharmaceutical products which meet the requirements of the healthcare system and the expectations of patients.

The Company’s production assets consist of 8 pharmaceutical plants located in Kursk, Ufa, Tomsk, Vladimir and in Ukraine’s Kharkov and 1 medical equipment plant in Tyumen.

The most popular Pharmstandard products today are Arbidol®, Complivit®, Pentalgin®, Flucostat®, Phosphoglive®, Amixin®, Afobazol®, Rastan® and Biosulin®. The Company manufactures more than 250 pharmaceutical products; more than 100 Pharmstandard products (taking into account all forms and dosages) are included in the list of Vital and Essential Pharmaceuticals.

Pharmstandard shares and GDRs are traded on the RTS-MICEX and LSE, respectively.

www.pharmstd.ru

[1] The data includes the sales of OJSC Biomed named after I.I. Mechnikov, Pharmapark LLC and LEKKO CJSC

[2] According to Pharmexpert data

[3] According to Pharmexpert data

[4] According to Pharmexpert data

[5] The sales data provided does not include sales of OJSC Biomed named after I.I. Mechnikov, Pharmapark LLC and LEKKO CJSC

[6] Organic sales indicate Pharmstandard’s own products