Pharmsynthez, a leading Russian pharmaceutical company, has plans to place its stock on the NASDAQ exchange by November 2014.

Pharmsynthez’s chairman Dmitry Genkin confirmed the plan for an IPO at a recent press conference held in Moscow. Alongside this announcement, Mr. Genkin also said that Pharmsynthez is aiming at increasing its net profits under U.S. GAAP in the year 2013. Discussions on dividends for 2012 are also scheduled in the weeks to come.

NASDAQ listing

Pharmsynthez is considering placing its listing on the American Exchange Bulletin Board by March 2014. Genkin had much information to share in this regard with the media. He said that in the month of March 2014, his company would start with a technical listing on OTC BB, which is NASDAQ’s sub-market. Seven months after the OTC BB listing, the company will do an IPO on NASDAQ. All the major investment banks will participate, and their individual roles have already been determined. Mr. Genkin also added that Pharmsynthez organized a road show some weeks prior to his announcement and that it was obvious that many American investors were taking interest in the company’s offers.

Mr. Genkin clarified that Pharmsynthez was not going to issue additional stock. He told reporters that all shareholders will be allowed to go through share conversion, and, if they wanted, they would be allowed to sell their shares. However, when asked about what stake of the company would remain in free float, the company’s president could not give any comments.

Analysts believe that once the company makes the NASDAQ listing, the free float percentage will double, reaching between 30 percent and 35 percent. The current figure is 17.5 percent.

Among Pharmsynthez’s shareholders, one prominent company is the Estonian entity EphaG AS, which owns almost 40 percent of the company, the greatest percentage share that any of the stakeholders has. Right behind EphaG AS is Rusnano, a nanotechnological corporation, with a share of 29.75 percent. Other companies that have relatively high share percentages are Sympatica Pharmac, with almost 18 percent of the shares, and Opko Pharmaceutical, a U.S.-based company holding 10.8 percent of the shares.

In February of 2013, Pharmsynthez entered into a transaction that was quite favorable to Opko Pharmaceutical, Rusnano, and Finarte Ou, which is an Estonian investment group. Pharmsynthez placed almost 50 million shares under closed subscription. This generated an amount of 1.12 billion roubles. 50 million shares is equivalent to 40.6 percent of Pharmsynthez’s charter capital. Pharmsynthez also placed about 30 percent of its capital on the Russian stock exchange, and generated about 528 million roubles. This happened in the month of November 2010 during the initial public offering on the exchange in Moscow.

An increase in U.S. GAAP profits

Pharmsynthez has other plans under consideration as well. One of these is to boost its nets profits under U.S. GAAP to USD1.8 million in 2013. The company’s net profits were around USD200,000 last year. The figure for the company’s revenues from sales is estimated to reach almost USD15 million, which is 12 percent greater than last year’s figure of USD13 million. The operating profits are forecasted at around USD400,000 this year and USD600,000 next year. Pre-tax profits are predicted to be around USD400,000 for this year and USD2 million for the next year. All the audited reports will be published in line with U.S. GAAP.

According to the Russian Accounting Standards, the profits of Pharmsynthez decreased to 94.1 percent, going down to RUR2 million during the previous year. Revenues from sales also suffered and decreased by 5.1 percent to reach the value of 380 million roubles.

Dividends

Pharmsynthez’s board of directors has scheduled a meeting in the upcoming weeks. The main focus for discussion will be shareholder issues. The agenda includes deciding on dividend payouts and profit allocations, as well as the appointment of individuals to the entity’s audit committee.

Pharmsynthez is a St. Petersburg company that was founded in 1996. The company produces a range of medicines and also sells active pharmaceutical ingredients. Pharmsynthez also manufactures drugs and develops drug carrier methods. The company has clients in Russia, the European Union, North America, and the C.I.S.