Moscow, July 25, 2013 – Pharmstandard OJSC (LSE: PHST IL, RTS: PHST RU) (further “Pharmstandard” or the “Company” announces its unaudited 1H2013 sales results. 

1H2013 sales data includes numbers for Pharmapark LLC, Biomed named after I.I. Mechnikov OJSC and LEKKO CJSC acquired in 2012 (further “New Companies”).

As of January 1, 2013 100% of TZMOI OJSC sales are included into the Company’s revenue.

Sales highlights.

· In 1H2013 Pharmstandard sales reached RUR16 436m demonstrating RUR270m or +2% y/y growth, compared to RUR16 166m in 1H2012

· In 1H2013 Pharmstandard sales excluding third party products (further “TPP”) reached RUR 10 544m demonstrating RUR2 141m or +25% y/y growth, compared to RUR8 403m in 1H2012

· Pharmaceutical products and medical equipment accounted for 97.2% and 2.8%. of the Company’s total sales in 1H2013, respectively

· In 2Q2013 Pharmstandard sales reached RUR7 292m falling RUR718m or -9% y/y, compared to RUR8,010m in 2Q2012

· In 2Q2013 Pharmstandard sales excluding TPP reached RUR4 467m demonstrating RUR443m or +11% growth y/y, compared to RUR4 024m in 2Q2012

1H2013 key highlights and developments

· Over-the-counter spin-off. On July 5, 2013 Company’s Board of Directors agreed to announce the extraordinary shareholder meeting (further “ESM”) to discuss Company reorganization, i.e. a spin-off of Company’s branded over-the-counter business (further “OTC”) into a separate legal entity whose shares will be proportionally distributed among the shareholders of the Company (further «NewCo»). In the course of the last several years the Company has significantly diversified its business within the Russian pharmaceutical market and stopped being just an OTC focused company: in 2012 71% of the total revenue came from TPP, Rx, Medical Equipment and Other. The main strategic rationale for the spin-off in management’s view is disclosure of the most adequate and proper value of OTC business to all of its shareholders. OTC business will have a separate experienced management team led by Olga Mednikova, presently Head of Marketing at Pharmstandard. Company’s management believes that going on forward the reorganization will allow achieving better results in growing both parts of our businesses – OTC and Rx. OTC business revenue reached RUR12 662m in 2012 which is 25% of the Company total revenue.

· The ESM on the spin-off of OTC will take place on September 27, 2013.

· Potential acquisition of 100% shares of Bever Pharmaceutical PTE LTD (further «Bever Pharma”). On July 5, 2013 Company’s Board of Directors agreed to announce an extraordinary shareholder meeting (further “ESM”) to discuss a potential acquisition of 100% share capital of Bever Pharma for US$630m. Bever Pharma holds exclusive rights for supply of active pharmaceutical ingredients (further “API”) for production of Arbidol® and Aphobazolum® at a fixed price. Following this acquisition, the Company will decrease its API procurement costs. The Company is currently in the process of due diligence of Bever Pharma and negotiations of key terms of the transaction and envisages to obtain customary for the transaction of this nature fairness and legal opinions from major international professional firms. Agreed price for Bever Pharma will be, among other things, subject to final due diligence findings.The Company envisages to sign definitive transaction documentation ahead of ESM and will provide full disclosure on key terms of the transaction. If approved by ESM, Bever Pharma will be acquired by the Company and will ultimately become part of NewCo. ESM on acquisition of Bever Pharma will take place on August 17, 2013.

· Buyback Program. On February 15, 2013 Company’s Board of Directors approved a buyback program in respect of ordinary shares of Pharmstandard OJSC and/or Global Depositary Receipts representing Shares (each GDR representing 4 Shares) (further the “Program”) in the aggregate amount of up to RUR8bn. Duration of the Program was until December 31, 2013. On July 17, 2013 the Company announced the completion of the Program in the course of which 15 009 162 GDRs and 140 000 ordinary shares were purchased on the open market as of July 16, 2013. Any Shares and GDRs acquired pursuant to the Program may be used for purposes of financing the Company's operations or for M&A transactions.

New shareholder structure is as follows: Augment Investments Limited – 54.3185% (ordinary shares and GDRs); LSE – 17.64% (GDRs); RTS/MICEX – 9.31% (ordinary shares); Pharmstandard-Leksredstva OJSC – 18.7392% % (ordinary shares and GDRs).

Pharmaceutical products. Sales results.

Pharmaceutical sales in 1H2013 increased by RUR186 million (+1%) up to RUR15 972m vs RUR15 786m in 1H2012, with organic sales accounting for 60%, TPP for 37% and API for 3% in the pharmaceutical sales mix.

Organic pharmaceutical sales in 1H2013 amounted to RUR9 567m (+23%) vs RUR7 771m in 1H2012 with 69% accounted for by OTC products and 31% by Rx products.

Organic prescription product (Rx) sales in 1H2013 grew by RUR672m (+30%) to reach RUR2 932m. Key growth drivers were Biosulin®, Combilipen® and Formetine®.

Organic over-the-counter (ÎÒÑ) product sales in 1H2013 went up to RUR6 635m (+20%). In 1H2013 Arbidol® demonstrated 75% growth vs 1H 2012 reaching RUR1 136m in sales.

TPP sales in 1H2013 went down to RUR5 892m (-24%) (vs RUR7 764 million in 1H2012).

Production localization. 7 Nosologies Federal Program.

TPP sales decrease in 1H2013 is directly attributed to production localization segment decline due to lack of government purchases via public auctions under 7 Nosologies Federal Program. This particularly relates to zero sales for Presista® that accounted for 54% of the total TPP sales a year before, as well as decrease in 1H2013 sales of both Presista® and Intellence® with their auctions being moved to regional levels.

Aggregate sales of production localization segment EXCLUDING Velcade® remained almost flat y/y.

For 2H2013 the auctions are announced for Infibeta®, Coagil®, Mabthera®, Velcade® , Pulmozyme® and Rastan® for the total amount of RUR1 430m. This sum may be subject to change.

Commercial segment

Commercial TPP sales reached RUR3 857m (+14%) primarily driven by Reduksin®, Tamiflu and Atimos.

Medical equipment sales as of 1H2013 amounted to RUR464m (+22%).

Pharmstandard OJSC sales structure, 1H2013

Pharmstandard OJSC sales structure (excl.TPP), 1H2013

Pharmstandard OJSC sales structure, 2Q2013

Pharmstandard OJSC sales structure (excl.TPP), 2Q2013