Moscow, 17 February, 2009 – JSC Pharmstandard (LSE: PHST LI, RTS: PHST RU) announces its unaudited 2008 sales results. The total revenue of the Company for the year increased by 28% and achieved RUR14,565 million (or US$586^[1] million).

Other highlights:

· Pharmstandard has been included into the list of strategic companies by the Government of the Russian Federation;

· Pharmstandard obtained European Union Good Manufacturing Practice (EU GMP) certifications for 6 production lines of JSC «Pharmstandard-Leksredstva»;

· International group of well-known scientists published the results of study of the mode of action of antiviral drug Arbidol® in the leading international virology journal - Antiviral Research (2009 Feb;81(2):132 -40). The study and the fact of publication of its results in major scientific peer-review journal confirm direct antiviral effect of Arbidol® bringing it into the line with worldwide-known anti-influenza medicines such as ozeltamivir. The sales of Arbidol® grew by 18% in 2008 and achieved RUR2,731 million.

· Pharmstandard acquired the Afobazol® trade mark from Donelle Company Limited entirely financed from the own funds. Afobazol® is the new original selective anxiolytic for anxiety disorders treatment and is patent protected until 2019. Pharmstandard’s sales of Afobazol® started in August 2008 and reached RUR218 million;

· Mildronate® project with Grindex developed well. Mildronate® sales achieved RUR1,368 million in 2008 and grew by 41%^[2];

· Pharmstandard announces successful development of SOLMIR project. According to the agreement with Solvay Pharmaceuticals (France), Pharmstandard will produce 2 immunomodulating products - IRS19® and Imudon®.  The sales of IRS19® has been recently started and achieved RUR31 million in December 2008;

· Pharmstandard’s gene-engineering products showed noticeable dynamic. The sales of Biosulin® grew by 36% to RUR164 million; 

· From the beginning of the year, the Company launched 14 new products: Bloctran®, Influnorm®, Combilipen®, Complivit® ophtalmo, Complivit® Se, Complivit® Fe, Complivit® Mg,  Neipomax®, Neirocomplit®, Octolipen®, Neosmectin®, Lactazar®, Formetin® and Pentalgin® Plus. New products contribution was RUR 212 million in 2008.

Sales

In 2008 Pharmstandard’s sales increased by 28% to RUR14,565 million (US$586 million), which represents the increase of RUR3,193 million in comparison with RUR11,371 million in 2007. Pharmaceutical products and medical equipment sales contributed 93% and 7% of total sales respectively. Sales growth for 9 months of 2008 was 34% and 26% in 4^th quarter of 2008.

In 2008 the Company’s sales of pharmaceutical products achieved RUR13,488 million (US$542 million) and increased by 38% compared to 2007.

The sales of OTC products were RUR10,567 million (US$425 million) in 2008 and grew by 24% in comparison with prior-year period. Arbidol®, Terpincod®, Pentalgin®, Complivit®, Codelac®, Flukostat® (tablets), Amixin® and Afobazol® generated key sales growth in OTC segment.  OTC segment sales growth excluding Afobazol® and IRS 19® sales were 23% in 2008.

The Company’s revenue from prescription (Rx) products amounted to RUR2,856 million (US$115 million) and increased by 140% compared with 2007. This increase in prescription sales was attributed to successful development of Mildronate® project as well as an increase in leading brands sales, such as Phosphogliv®, Biosulin®, Cyclodol®, Pikamilon® and Renipril®. Rx segment sales growth excluding Mildronate® sales was 25%.

In 2008 the Company reported revenues of RUR1,077 million (US$43 million) from its medical equipment business, which represents a 33% decline in comparison with 2007 and generally attributable to the government tender sales in 2007.

Sales structure – FY 2008, RUR mln.

* - restated numbers, according to 2008 OTC/Rx reclassification

Sales structure – 4Q 2008, RUR mln.

* - restated numbers, according to 2008 OTC/Rx reclassification

Market

According to Pharmexpert data, Pharmstandard is one of largest pharmaceutical companies operating in Russia^[3]. Pharmstandard is a leader of the biggest commercial segment of the Russian pharmaceutical segment^[4]. Pharmstandard is the only one among domestic pharmaceutical companies which ranked in TOP10 market leaders.

Pharmstandard is the only pharmaceutical company at the Russian market which has 6 brands  among top-10 (in comparison with 6 brands in top-20 in 2008) best selling domestic brands in Russia such as Arbidol®, Pentalgin®, Terpincod®, Complivit®, Codelac®, Flucostat® and Amixin®.

Conference Call

Pharmstandard is pleased to invite the investment community to a sales results conference call with the management of the company followed by a Q&A session.

Tuesday, February 17, 2009

09:00 New York

14:00 London

17:00 Moscow

International Call-in Number:  +44 (0)20 7162 0025
Free Phone (US Only): +1 877 491 0064

Conference call presentation will be available on Tuesday, 17 February 2009 on Company’s web-site:

https://www.pharmstd.ru/investors_en/investor/p2/

We recommend that participants start dialling in 5-10 minutes prior to ensure a timely start to the conference call.
Conference call participants can register in advance using the link below:

https://eventreg1.conferencing.com/webportal3/reg.html?Acc=387058&Conf=164364

Pharmstandard will be represented by:

Igor Krylov, CEO
Elena Arkhangelskaya, CFO
Olga Mednikova, Sales & Marketing

The conference call replay will be available through February 20, 2009.

International Replay Number: +44 (0) 20 7031 4064
Toll Free Replay Number (US only): +1 888 365 0240
Replay Access Code: 826064