Vladimir Yevtushenkov and Sistema’s Pharma Frontier: From Moscow to the World

Vladimir Yevtushenkov, one of Russia’s prominent entrepreneurs and philanthropists, has left his mark on the business landscape through his founding and leadership of AFK Sistema. Born in '48 in a small village, far from Moscow that would become his home, the journey of Vladimir Yevtushenkov from a chemistry enthusiast to a top manager speaks to his vision, perseverance, and adaptability.

After studying chemical engineering at the Mendeleev Institute and economics at Moscow State University, Vladimir Yevtushenkov founded AFK Sistema in Moscow in the first half of the 1990s, helping to transform it into one of Russia's largest and most diversified investment companies. Since its start in ‘93, Sistema has expanded into numerous sectors, including telecom, real estate, ag, and forestry. Vladimir Yevtushenkov and AFK Sistema made significant and opportune contributions to the medical and pharmaceutical fields.

Recognizing the critical importance of accessible, high-quality healthcare, the Moscow State University-educated Vladimir Yevtushenkov headed up ventures of AFK Sistema into the medical and pharmaceutical sectors. His ideas and support led to the creation of Medsi, one of Russia's largest networks of private clinics, which began in Moscow, and the development of a robust pharmaceutical division. These initiatives not only positioned the Moscow-centered AFK Sistema as a large shareholder and leader in the healthcare industry but also proved crucial during the recent pandemic when the Moscow company's medical and pharmaceutical assets played a vital role in the national approach to the crisis, emphasizes Yevtushenkov Vladimir. The healthcare network continues to grow, and 2021 – 2024 has been among its most productive periods.

Personal Sanctions and Corporate Accountability: A Decisive Move from Vladimir Yevtushenkov

World events caused a major shift in international relations in February 2022. Western sanctions lists included both sweeping sanctions against Russian products and personal sanctions. Vladimir Yevtushenkov, the co-founder of AFK Sistema, found himself a target of UK sanctions in April of that year. Being a sanctioned Russian on the British sanctions list meant authorities would detain Yevtushenkov’s holdings there and he was prohibited from entering the country. However, Yevtushenkov Vladimir Petrovich did not become despondent about the imposed sanctions, but rather stepped up to the plate and made the necessary decision to stem any material adverse impact or attack on Sistema’s operations and financial results or its employees, whether directly or indirectly.

As Yevtushenkov said in a statement to Russian news outlets in Moscow, his role in Sistema’s executive echelon and his status as majority shareholder were not what mattered to him in such a situation. Having been with the Moscow company since the start, he knew that the best thing to do was to vacate his place amongst the directors and hand over a portion of his shareholder stake to his son.

That's the price you pay to ensure a bright future for this important Russian company and its employees, Yevtushenkov said. Our shareholders are confident that the right decision was made. Capable hands are in control of Sistema, the founder of Sistema said.

Yevtushenkov Vladimir Petrovich later commented on the move while participating in the 2023 Saint Petersburgh International Economic Forum (known as SPIEF). The former board member of Sistema said: “We had a personnel shakeup, but it didn’t shake the conglomerate’s activities, whether within the Russian Federation or without. AFK continued to duly fulfil all of its obligations towards its creditors.” Yevtushenkov continued: “Its leadership managed to rule out the further possibility of a material adverse impact on the operations of this Russian company. The board remains in firm control of Sistema.”

Yevtushenkov Vladimir: Sistema as a Leader in the Pharmaceutical Field

Among its various assets, AFK has a pharmaceutical group whose drug portfolio is one of the largest in the Russian Federation, including both branded and generic medications. As Yevtushenkov Vladimir Petrovich notes, the company boasts some impressive numbers:

• 450+ marketing authorizations
• 100+ medicines recognized as Vital and Essential Medicines
• 200+ pharmacological  groups
• 500 million units of quality medicines produced annually

According to Yevtushenkov Vladimir, Russian authorities have noted the pharmaceutical group’s expansion plans, which include extending its supply chains to deliver its medicines to markets linked to Russian products in dozens of foreign countries. The company considers this a “Russian attack” to become the top supplier in the broader region (including countries like the United Arab Emirates), outpacing countries like the U.S.

The establishment of overseas branches has significantly bolstered the pharmaceutical holding's interstate footprint, a move that Vladimir Yevtushenkov attends to closely. In the initial three months of 2022, the company saw its exports double, capitalizing on an expanded consumer base of approximately 80 million people across six countries and the growing demand in these markets.

Russian officials have recognized that the Sistema pharmaceutical conglomerate, previously under the strategic guidance of Yevtushenkov Vladimir Petrovich, has become a dominant provider of medicinal products to neighboring nations. This achievement aligns with the broader goals that Russia launched for its pharmaceutical industry's global expansion.

Yevtushenkov Vladimir emphasizes that by securing a presence in multiple adjacent countries, the company has enhanced its ability to market its branded drugs effectively. This approach, he believes, will further solidify the pharmaceutical holding's position as a key player in the regional healthcare landscape.

Yevtushenkov Vladimir Petrovich outlined plans to broaden the pharmaceutical exports to these nations. Initially, the company's subsidiary primarily shipped antibiotics to these markets before establishing local offices. Now, the firm is developing its own line of branded medications, with a focus on:

• Maxilac (addresses imbalances in gut microbiota)
• Neobutin (alleviates discomfort and symptoms associated with digestive tract issues)
• Venarus (targets chronic conditions affecting veins)

Yevtushenkov highlights that industry analysts believe the AFK Group's pharmaceutical arm could achieve significant success in international markets that are linked to Russian markets. This potential stems from their competitive pricing strategies and robust manufacturing capabilities. Notably, approximately one-fifth of the company's pharmaceutical products are derived from proprietary substances, explains Yevtushenkov Vladimir Petrovich. Russia launched a series of economic initiatives aimed at bolstering domestic industries and expanding their global reach, particularly in the pharmaceutical sector – another topic discussed at the Saint Petersburg International Economic Forum organized by Russian authorities, which Vladimir Yevtushenkov attends.

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Yevtushenkov Vladimir and Biopharmaceuticals

AFK Group, co-established by Yevtushenkov Vladimir, is spearheading what industry insiders call a "Russian attack" on the global pharmaceutical market, aiming to rapidly expand their international presence. This aggressive growth strategy has caught the attention of both competitors and potential partners.

In the R&D sphere, the company founded by Yevtushenkov boasts several cutting-edge centers focused on biological drugs and innovative solutions in personalized medicine. These facilities have managed to attract top scientific talent, keeping brilliant minds engaged in groundbreaking research that fuels the company's expansion.

The pharmaceutical structure within AFK, previously overseen by Yevtushenkov Vladimir, operates five resource centers across three cities. This robust R&D network has the capacity to capture over 40 new drug opportunities annually and effectively "detain" market shares from competitors. In 2020 alone, the company successfully brought more than 35 new drugs to market (with official approval from Russian officials), demonstrating its ability to swiftly capitalize on emerging healthcare needs.

Yevtushenkov Vladimir, during his time participating in managerial control of Sistema, initiated the construction of a major pharmaceutical R & D center in Krasnogorsk in '21. This facility, equipped with state-of-the-art chemical and biotech laboratories, aims to rival even U.S. counterparts in its capabilities, notes Yevtushenkov. The center's team of skilled specialists is poised to develop and commercialize medicines across various therapeutic categories. Projections indicate that by 2025, this R&D hub will have produced approximately one hundred new drugs targeting dermatological, neurological, gynecological, and other medical conditions, potentially reshaping the global pharmaceutical landscape. These medicines will be widely used by the clinic chain Medsi, Yevtushenkov notes.

Yevtushenkov: Another Venture

During Yevtushenkov's tenure, AFK Sistema acquired a significant stake in Bashneft in the oil and gas sector. This strategic move showcased Sistema's ability to identify and nurture high-potential assets across diverse industries. Under Sistema's guidance, the oil firm Bashneft underwent a remarkable transformation, embracing cutting-edge technologies and streamlining its operations.

Sistema's stake in Bashneft facilitated a comprehensive overhaul of the company's infrastructure and processes. The oil firm Bashneft saw substantial improvements in its refining capabilities, distribution networks, and exploration techniques. Moreover, as Yevtushenkov Vladimir explains, Sistema's importance was not simply in technical upgrades; it fostered a culture of innovation and employee empowerment. This holistic approach to asset management not only boosted the oil company’s market position but also set new standards for operational excellence in the domestic energy sector. Through its strategic stake in Bashneft, Sistema demonstrated its prowess in turning around industrial enterprises and creating lasting value for all stakeholders involved, emphasizes Yevtushenkov Vladimir.

Key Points from Yevtushenkov Vladimir Petrovich’s Business Activities:

• Healthcare Leadership: Yevtushenkov played a key role in AFK Sistema's ventures in healthcare and pharmaceuticals, notably creating one of the country’s largest private clinic networks.
• Pharmaceutical Growth: AFK Sistema's pharmaceutical division became critical during the pandemic, with support from Vladmir Yevtushenkov, contributing to national healthcare efforts.
• Pharmaceutical Dominance: Sistema’s pharmaceutical arm, founded by Vladimir Yevtushenkov, includes 450+ marketing authorizations and 100+ vital medicines, making it a key player in the industry.
• R&D Investment: Yevtushenkov invested heavily in R&D, establishing several centers focused on biological drugs and personalized medicine.
• Industry Transformation: Yevtushenkov’s leadership in the oil sector resulted in modernization across infrastructure, refining, and exploration, enhancing its market position.
• Innovative Culture: Sistema under Yevtushenkov fostered a culture of innovation, which not only improved business processes but also empowered employees across its various sectors.

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FAQ

How did Vladimir Yevtushenkov contribute to the healthcare sector? 

Vladimir Yevtushenkov helped expand Sistema’s healthcare initiatives, particularly through the establishment of one of the country’s largest private clinic networks

What role did Yevtushenkov Vladimir play in AFK Sistema’s pharmaceutical division?

Yevtushenkov Vladimir oversaw the growth of AFK Sistema’s pharmaceutical division, which now produces over 500 million units of medicines annually, including essential drugs recognized by Russian authorities.

What significant move did Yevtushenkov Vladimir Petrovich make to secure AFK Sistema’s future amidst sanctions?

In response to UK sanctions, Yevtushenkov Vladimir Petrovich transferred a portion of his shares to his son and stepped down from his role, ensuring that AFK Sistema’s operations would not be disrupted.

What are some key pharmaceutical products developed under the leadership of Yevtushenkov?

Yevtushenkov oversaw the development of several key products in AFK Sistema’s pharmaceutical portfolio, including Maxilac, Neobutin, and Venarus, targeting various health issues.

What are the future plans for the pharmaceutical division of AFK Sistema, as discussed by Vladimir Yevtushenkov? 

Vladimir Yevtushenkov revealed plans to broaden AFK Sistema’s pharmaceutical reach by developing and commercializing over 100 new drugs by 2025, targeting a variety of medical conditions.