Roadshow Presentation 0 April / May 2007 Roadshow Presentation Initial Offering — Roadshow Presentation

Roadshow Presentation1

April / May 2007

Roadshow Presentation

Initial Offering—Roadshow Presentation


Disclaimer and Confidentiality Requirements

This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of OJSC Pharmstandard (the “Company”) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever.

This presentation has been prepared solely for use in connection with the possible offering of ordinary shares (the “Shares”) and global depositary receipts representing shares (“GDRs” and, together with the Shares, the “Securities”) in the Company (the “Offering”). This document is an advertisement and not a prospectus and any purchase of Securities in the Offering should be made solely on the basis of information contained in the prospectus and any supplemental prospectus to be published in respect of the Offering. The information contained in this presentation has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of Augment Investments Limited (the “Selling Shareholder”) or the Company or any of their respective affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation.

This presentation is only for persons having professional experience in matters relating to investments and must not be acted or relied on by persons who are not Relevant Persons (as defined below). Solicitations resulting from this presentation will only be responded to if the person concerned is a Relevant Person.

This presentation is not for distribution in, nor does it constitute an offer of securities in the United States, Canada, Australia or Japan. Neither the presentation nor any copy of it may be transmitted into the United States, its territories or possessions, or distributed, directly or indirectly, in the United States, its territories or possessions. Any failure to comply with this restriction may constitute a violation of US securities laws. The presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. The Company has not registered and does not intend to register any portion of the Offering in the United States or to conduct a public offering of any securities in the United States.

This presentation is made to and directed only at (i) persons outside the United Kingdom, (ii) qualified investors or investment professionals falling within Article 19(5) and Article 49(2) (a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), and (iii) high net worth individuals, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (such persons collectively being referred to as "Relevant Persons").

This presentation and its contents are confidential and must not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person, whether or not such person is a Relevant Person. Failure to comply with this restriction may constitute a violation of applicable securities laws. If you have received this presentation and you are not a Relevant Person you must return it immediately to the Company. This presentation does not constitute a recommendation regarding the securities of the Company.This presentation is not a public offer or advertisement of Securities in the Russian Federation and is not an invitation to make offers to purchase any Securities in the Russian Federation, and must not be passed on to third parties or otherwise be made publicly available in Russia. The GDRs have not been and will not be registered in Russia and are not intended for “placement” or “circulation” in Russia.This presentation includes 'forward-looking statements'. These statements contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's projects and services) are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this presentation. Each of the Company and the Selling Shareholder and their respective agents, employees and advisers, expressly disclaims any obligation or undertaking to update any forward-looking statements contained herein.

Citigroup Global Markets Limited and UBS Limited are acting for the Company and no one else in connection with the proposals referred to in the presentation and will not be responsible to any other person for providing the protections afforded to their client, or for providing advice in relation to such proposals.

The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice.All information not separately sourced is from Company data.


Today’s Presenting Team

Name Title

Dr. Igor Krylov CEO, Chairman of the Management Board and Member of the Board of Directors

Elena Arkhangelskaya Chief Financial Officer

Dr. Olga Mednikova Chief Sales and Marketing Officer

Maxim Stetsuk Head of IR/Financial Management


1. Company Overview

Dr. Igor Krylov, CEO


Pharmstandard at a Glance

Leading domestic pharmaceutical company in Russia (measured by sales)

– #4 pharma company overall in Russia by sales value in 20061

– #2 pharma company in the commercial segment by sales value in 20061

Industry leading growth and profitability

Market leading brands

– 5 brands among top-15 best selling domestic brands in Russia1

– Arbidol®, Pentalgin®, Complivit®, Terpincod®/Codelac®, Flucostat®

Acquired Masterlek in August 2006

– Added 30 products including 2 market-leading brands, Arbidol® and Flucostat®

Experienced sales force and modern and efficient manufacturing facilities

– 287 sales reps2, all with a medical background

– Russian GMP compliant facilities, including lines at Kursk, some of which are EU

GMP compliant

Source: Company1 Pharmexpert, preliminary data (subject to change), in wholesale

prices2 As at 31 December 2006


Diversified Product Portfolio

Pharmaceuticals

87% of 2006 sales

Medical Devices

13% of 2006 sales

OTC71% of 2006 sales

Rx2

16% of 2006 sales

Therapeutic focus: Analgesics Cough & cold Vitamins Anti-viral Anti-fungal

Product portfolio includes: Acid pump inhibitors Nitrites & nitrates ACE inhibitors Alimentary tract

metabolism

Product portfolio includes: Sterilisers Distillers Medical disposables

Source: Company

Note: 1 Pro forma 2006 sales, including Masterlek from 2 August 2006

2 Includes Other sales

1


Investment Case

Leading pharmaceutical company in the most rapidly growing pharma market

Attractive industry fundamentals

Portfolio of market leading brands

Proven product development strategy

Experienced sales force

Modern and efficient manufacturing facilities

Operational efficiency

Experienced management team


Our Strategy

Promote our market-leading brands to drive sales growth and profitability

Launch new products on a regular basis

Expand sales and marketing effort

Continue to actively control costs

Grow through acquisitions

Exploit opportunities from Federal Reimbursement Programme (FRP) as they arise

Building a top-3 pharmaceutical company in Russia


2. Market Overview

Dr. Olga Mednikova, Chief Sales and Marketing Officer


Russia—The World’s Fastest Growing Pharma Market

Source: DSM, EIU

(in retail prices, US$bn)

Russia was the fastest growing pharma market in 2005–2006

28%24%

17%14%

8% 7% 7%5% 5%

3% 3% 2%

(6%)(10)

(5)

0

5

10

15

20

25

30

Rus

sia

Braz

il

Chin

a

Cana

da

Mex

ico

US

Spai

n

Fran

ce UK

Ger

man

y

Ital

y

Aust

ralia

/NZ

Japa

n

2006

gro

wth

rat

e (

%)

Pharma marketsize (US$bn)

8.4 8.4 11.4 13.7 8.1 197.8 11.6 25.6 15.7 27.7 14.9 5.8 56.7

Population (in million) 142 187 1,315 33 108 340 45 61 60 83 58 25 128


214

165142

111

47 38

230194

171

119

50 49

0

50

100

150

200

250

300

Hungary CzechRepublic

Slovakia Poland Romania RussiaCo

nsu

mp

tio

n p

er c

apit

a ($

)

2005 2006

Source: Pharmexpert, EIU Market Indicators

Russian Pharma Market Set to Expand

Drug consumption per

capita amongst lowest in

Europe

Rapid market growth

expected to continue

Russia was the fastest

growing market globally

in 2004-2006

Pharmaceutical Consumption Per Capita in Russia($)

2733

3844

58

70

0.00

20.00

40.00

60.00

80.00

2001 2002 2003 2004 2005 2006

Co

nsu

mp

tio

n p

er c

ap

ita

($)

Pharmaceutical Consumption Per Capita by Country($)


Russian Pharma Commercial Market Drivers

Commercialization and

development of distribution

channels

Affordability boosts access

and consumption

Strongmacroeconomic

s driving consumer boom

Supportive demographic

trends

Increased consumer focus on health and

well being

Market Drivers


A Leader in the Russian Commercial Segment

Market Share—Top 10 Companies1 Market Share—Top 10 Domestic Companies1

Source: Pharmexpert, preliminary data (subject to change)Notes:1 Commercial segment 2006, based on sales in wholesale prices2 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006

PHS is #2 in the US$5.3bn commercial segment (66% of the total market)

2

2

Other69.2%

Nizhpharm (Stada)2.2%

Nycomed2.6%

Sandoz2.6%

Gedeon Richter2.8%

Novartis2.8%

Servier2.9%

Berlin-Ch/Menarini3.4%

Sanofi-Aventis4.5%

Pharmstandard4.2%

Pfizer3.0%

Other53.7%


Materia Medika4.5%

Otechestvennie Lekarstva

3.4%

Microgene Npo3.2%

Farm-Centr2.1% Verofarm Zao

2.7%

Akrikhin (Polpharma)

2.7%

Moshimfarmpreparaty2.5%

Pharmstandard17.7%

Krasnogorskleksredstva2.6%

2

2


Well Positioned to Capture FRP Upside

In 2006 FRP budget was set at RUR 29bn (RUR 70bn spent)1

2005 budget was set at RUR 51bn (RUR 46bn spent)1

Resulted in a number of products being removed from the FRP list both voluntarily and involuntarily by pharma companies as FRP officials ask for even longer payment terms and simultaneously cut prices

17.1 million participants eligible—8.7 million currently enrolled21

2007 FRP budget is set at approximately RUR 35bn3

Key facts

Short term solution:

– Reallocating funds from prior and future years (~RUR 20bn)

– Additional allocation of RUR 16bn Going forward Government focused on including generic domestic

products on FRP list rather than expensive foreign products

– Currently only 7% of the total FRP market is serviced by Russian pharma companies

Current status

Although FRP currently in adjustment mode, domestic pharmacompanies appear to be future beneficiaries Source:

1 RBC daily, 4 September 2006 2 Commersant (Russia) 6 March 20073 Pharmvestnik #2, 23 January 2007


Low Exposure to FRP

Source: Pharmexpert, preliminary data (subject to change)

Note: Based on wholesale prices in US$

Pharmstandard has a lower exposure to the FRP compared to its peers

Composition of Leading Companies’ Sales in Russia by Market Segment in 2006

0

10

20

30

40

50

60

70

80

90

100

Sanofi-Aventis Novartis Janssen-Cilag Pharmstandard Berlin-Ch/Menarini

Servier Roche Gedeon Richter Pfizer Nycomed

Commercial FRP Hospital


3. Product Portfolio/Pipeline

Dr. Olga Mednikova, Chief Sales and Marketing Officer


Our Portfolio – Top 15 Pharmaceutical Products

Source: CompanyNotes:1 Sales only formed part of consolidated results from 2 August 20062 Total Pharmaceutical products sales include products categorised as Other

ATC 2 2005 Sales 2006 SalesProduct Status therapeutic segment (RURm) (RURm) Growth (% )Terpincod® OTC Cough and cold 975 1,163 19.2%Arbidol®(1) OTC Antiviral 0 1,032 NMPentalgin — N® OTC Analgesics 586 796 35.8%Complivit® (excluding Mama® and Active®) OTC Vitamins 394 545 38.5%Pentalgin — ICN® OTC Analgesics 313 410 31.0%Codelac® OTC Cough and cold 222 375 69.1%Phosphogliv® Rx Antiviral 6 254 NMFlucostat®(1) OTC Anti-fungal 0 197 NMCorvalol® OTC Psycholeptics 148 155 4.9%

Amixin®(1) Rx Antiviral 0 137 NMAskophen® OTC Analgesics 82 80 -2.4%Validol® OTC Cardiac therapy 54 69 26.6%Complivit Active® OTC Vitamins 46 68 48.9%Oligovit® OTC Vitamins 57 60 5.2%Citramon P® OTC Analgesics 41 51 26.6%Top-15 Pharmaceutical products 2,923 5,390 84.4%Other Pharmaceutical products 1,751 1,936 10.6%

Pharmaceutical products total(2) 4,674 7,326 56.8%


Pharmstandard’s Leading Brands

5 leading brands

“Top of mind” position with consumers

Significant brand loyalty

Trademark Ranking

share

Pentalgin 3

Arbidol 1 1

Howthorn 5Sodium Chlorid 4

Terpincod 6

Chondroxid 10

Mexidol 2

Viferon 8

Phenotropil 9

Complivit 11

Cephazolin 12

Essliver 14

Impaza 17Corvalol 18

Flucostat 1 13

Glucose 15

Biphidumbacterin 16

Cyclopheron 20

Exclusively produced by PharmstandardProduced by Pharmstandard

Leading domestic pharma trademarks by sales value in 2006

Source: Pharmexpert. Based on consumer prices, Rx and OTC productsNote:1 Masterlek Brands

Anaferon 7

Proproten 19


Focused Sales and Marketing Efforts

Covers 75% of the Russian pharma market

All sales reps have medical education/work experience

Appropriately incentivised with cash bonus up to 33% of salary

In 2007 looking to:

– Increase to over 350 sales people

– Further specialise sales force by therapeutic area

Electronic Territory Management System (ETMS) system improving efficiency

Significant sales and marketing capabilitiesNote: As of 31 December

2006Source: Company

Sales force Marketing / Advertising

Promote products through TV, radio, print media and internet as part of focus on brand building

Launched 5 new marketing campaigns since September 2006, including TV campaigns for Pentalgin®, Arbidol® and Flucostat®

Pentalgin® Print / TV campaign

Arbidol® Print / TV campaign


Ocillococcinum (Laboratoire

Boiron)7.6%

Viferon (Feron Ooo)

13.7%

Cycloferon (Polysan)

6.6%

Anaferon (Materia Medika)4.5%

Aflubin (Richard

Bittner GmbH)4.2%

Amixin (Pharmastanda

rd)5.7%

Grippferon (Frn-M Zao)

2.3%

Other6.3%

Immunal (Sandoz)

7.3%

Anaferon for Kids (Materia

Medika)9.8%

Arbidol (Pharmstandard)32.1%

Amixin(Pharmstandard)

5.7%

Arbidol®—#1 Pharma Brand in Russia

Arbidol®

Captured #1 brand position, in part, through active promotion by Pharmstandard sales force

Acquired as part of Masterlek transaction

Original product developed in 1987, active marketing launched in 2000

Source: Pharmexpert (subject to change)Note: Remodelled to reflect current categories

Leading Products in Anti-infective Systemic Use Segment (2006)

Annual Segment Sales Dynamics1,2

29.6 40.362.3 74.6

97.0128.712.2

16.4

44.9

82.9

5.53.1

1.231.49

1.91

3.03

3.89

4.72

0

50

100

150

200

250

2001 2002 2003 2004 2005 2006

Sale

s (U

S$m

)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Average price (U

S$)

Other Pharmstandard Average price (US$)

1 Source: Pharmexpert, 2006 preliminary data (subject to change) 2 Based on consumer prices

Source: Company


Pentalgin-N (Pharmstandard)

15.8%

Tempalgin (Sopharma)

8.0%

Baralgin M (Sanofi-Aventis)

7.8%

Pentalgin-ICN (Pharmstandard)

7.8%

Sedalgin-Neo (Actavis)

5.9%

Sedal-M (Sopharma)

3.4%Solpadeine (GSK)3.3%

Cardiomagnyl (Nycomed)

2.7%

Alka-Seltzer (Bayer)2.5%

Nurofen Plus (Reckitt Benckiser)

2.2%

Other40.5%

Pentalgin—#1 Pain Reliever (Non-Narcotic)

Source: Company

Pentalgin

Looking to launch new (improved) formulation of Pentalgin in 2007 to capitalise on Pentalgin’s brand recognition

Franchise includes Pentalgin-N® andPentalgin-ICN®

First launched Pentalgin-ICN® in 1999 and followed with launch of Pentalgin-N® in 2002

Steadily gained market share since 2001


Top-10 Products in Analgesics Segment (2006)


73.599.6 102.8 100.8

126.6147.8

16.5

23.8 24.1 30.8

54.7

57.6

0.48

0.42

0.320.260.25

0.20

0

50

100

150

200

250

2001 2002 2003 2004 2005 2006

Sale

s (U

S$m

)

0.0

0.1

0.2

0.3

0.4

0.5

0.6

Average price (U

S$)




Heptral (Abbott)19.3%

Essliver Forte (Stada)9.6%

Carsil(Sopharma)

9.1%

Other16.7%

Berlition 300(Berlin-

Ch/Menarini)7.5%

Tycveol(Europa-

Biopharm)4.1%

Essentiale(Sanofi-Aventis)

29.8%

Pharmstandard (Phosphogliv)

4.0%


Top products in Hepatic Protectors segment (2006)

Phosphogliv® – Successful Rx Product Launch

Phosphogliv®

Launched in 2005 Novel product in-licensed from the Institute

of Biomedical Chemistry Premium priced product based on superior

efficacy Patent protected until 2018 Clinically validated

– 2nd generation combination therapy with anti-viral, anti-inflammatory andimmunomodulating properties

Annual segment sales dynamics1

Source: Company

51.0 67.6 78.0 88.4126.7

187.0

7.8

0.90.6

2.5

1.51.2

3.834.49

5.065.82

6.79

8.71

0

50

100

150

200

250

2001 2002 2003 2004 2005 2006

Sale

s (U

S$m

)

0

2

4

6

8

10

Average price (U

S$)




PHS Recent Product Approvals and Launches

Source: Pharmexpert, preliminary data (subject to change)Note:1 Russian segment size – retail audit2 Excludes regional tenders

OTC

Rx

OTC

Rx


Product PipelineR

x

Near term pipelineProducts in registration

Products in development

ATC2

Products

Immunostimulating agents 2 Psychoanaleptics excluding anti-obesity preparations 1

Pituitary and hypothalamic hormones 1 Urologicals 1 Anti-asthma and COPD products 2 Antithrombotic agents 1

Total 8

OTC

ATC1

Products

Vitamins 8

Analgesics 1

Cough and cold preparations 1

Laxatives 1

Nonsteroidal products for inflammatory skin disorders 1

Total 12

ATC1 Product applications Formulations

Number of registered

trademarks

Vitamins 4 8 4 Mineral supplements 2 3 2

Wound healing agents 1 1 Immunostimulating agents 1 1 1

Analgesics 2 2 1 Cough and cold preparations 1 2 1

Total 11 17 9

ATC1 Product applications Formulations

Number of registered

trademarks Functional gastro-intestinal disorder drugs 1 1 1 Antiemetics and antinauseants 1 2 1 Cholagogues and hepatic protectors 2 4 2 Drugs used in diabetes 3 9 2 Vitamins 2 4 2 Cardiac therapy 2 2 1 Agents acting on the renin-angiotensin system 1 1 1 Hypolipidaemics/anti-atheroma preparations 1 2 Topical corticosteroids 1 2 Pituitary and hypothalamic hormones 1 1 1 Immunostimulating agents 1 1 1 Analgesics 1 1 1 Psycholeptics 1 1 1 Total prescription 18 31 14

Pipeline of OTC and Rx products supports Pharmstandard’s growth story


4. Financial Overview

Elena Arkhangelskaya, Chief Financial Officer


3,3473,902

6,032555

1,199

39

96

96

1,011

1,196

6,722

733

1,331

44

1,196

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2004 2005¹ 2006² 2006 PF³

RU

R m

illio

ns

OTC Prescription Other Medical Equipment

Rapidly Growing Revenue Profile

Source: Company

Note:

1 2005 results include results of Tyumen acquisition (as of 1 January 2005)

2 2006 results include results of Masterlek acquisition (as of 2 August 2006)

3 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006

4 Organic growth excludes sales by Masterlek (standalone Masterlek sales in 2006 RUR 2,283m and in 2005 RUR 1,362m, according to IFRS)

Achieved 25% organic growth4 in 2006

1%

14%

72%

13%

13%

69%

18%

1%

14%

71%

14%

1%14%

85%

5,685

8,523

9,374

3,946


13.2%

5.9%6.0%

7.8%

0

100

200

300

400

500

600

2004 2005¹ 2006² 2006 PF³

RU

R m

illio

ns

0%

2%

4%

6%

8%

10%

12%

14%

Labour costs Other expenses As % of Sales

433

522499

549

13.5%

14.9% 14.6%

18.8%

0

200

400

600

800

1,000

1,200

1,400

1,600

2004 2005¹ 2006² 2006 PF³

RU

R m

illio

ns

0%

5%

10%

15%

20%

25%

Marketing & advertising Labour costs Other expenses As % of Sales

1,069

532

1,268

1,372

Competitive Cost Structure

General and Administration CostsSelling and Distribution Costs

Source: Company reports

Note:

1 Tyumen consolidated as of 1 January 2005

2 Masterlek consolidated as of 2 August 2006



5,233

4,942

3,178

1,726

43.7%

55.9%

58.0%

55.8%

0

1,000

2,000

3,000

4,000

5,000

6,000

2004 2005¹ 2006² 2006 PF³

RU

R m

illio

ns

35.0%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

70.0%

Gross Profit Gross Margin (%)

Margin Expansion

EBITDAGross Profit


Note:




583

1,720

3,252

3,497

37.3%38.2%

30.3%

14.8%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2004 2005¹ 2006² 2006 PF³

RU

R m

illio

ns

10%

15%

20%

25%

30%

35%

40%

45%

50%

EBITDA EBITDA margin (%)


320

2,036

8.1%

17.9%

23.9%

0

500

1,000

1,500

2,000

2,500

2004 2005 2006 2006 PF

RU

R m

illio

ns

0%

5%

10%

15%

20%

25%

30%

Net Profit Net Margin

1,019

2,006

Attractive Profitability Growth

FY Net Profit 2004–2006


Note:



3 Pro Forma assumes inclusion of Masterlek as part of Phamstandard as of 1 January 2006

21.4%

1 2 3


Logical Consolidator—Masterlek Acquisition Overview

Our business was built through several strategic transactions

Masterlek is the largest pharmaceutical transaction in Russia to date

Focused on anti-viral and anti-fungal therapeutic segments

– 3.5% market share among domestic producers by sales value in 20051

Portfolio of 30 products:

– Leading brands include Arbidol® and Flucostat®

Arbidol’s complementary fit with the Pharmstandard cough & cold franchise

Significant cost savings anticipated through integration

Source: CompanyNote: 1 Pharmexpert

Focused on pursuing attractive acquisition opportunities


Consolidated Balance Sheet and Capex

Capital Expenditure

189

889 890

0

200

400

600

800

1,000

2004 2005 2006

Ca

pex

(R

UR

m)

IFRS basis

Debt summary

Facility A: US$91m (maturity Dec-2009/L+150)

Facility B: US$55m (maturity Dec-2011/L+190)

Net debt: US$140m


Modern Production Facilities

Source: Company

Note: Capacity in packs. Figures shown are as of 31 December 2006

Tomsk

Tyumen

Moscow

Ufa

Kursk

TomskhimpharmCapacity: 208m

TZMOIUfavitaCapacity: 169m

LeksredstvaCapacity: 645m

St. Petersburg – Facility Closed

Nizhny Novgorod

PhytopharmCapacity: 48m

Pharmstandard HQ


0%

10%

20%

30%

40%

50%

60%

Phar

mst

anda

rd

Act

avis

Asp

en

Egis

Ged

eon

Ric

hter

Hik

ma

Krk

a

Stad

a

Ver

opha

rm

Zent

iva

0%

10%

20%

30%

40%

Phar

mst

anda

rd

Act

avis

Asp

en

Egis

Ged

eon

Ric

hter

Hik

ma

Krk

a

Stad

a

Ver

opha

rm

Zent

iva

Core Comparables Benchmarking

Sales growth (2006)

Net profit margin (2006)EBITDA margin (2006)

Gross margin (2006)

PHS has industry leading growth and profitability

0%

20%

40%

60%

80%

Phar

mst

anda

rd

Act

avis

Asp

en

Egis

Ged

eon

Ric

hter

Hik

ma

Krk

a

Stad

a

Ver

opha

rm

Zent

iva

Source: Company reports. Veropharm figures based on equity research as 2006 results not available

0%

10%

20%

30%

Phar

mst

anda

rd

Act

avis

Asp

en

Egis

Ged

eon

Ric

hter

Hik

ma

Krk

a

Stad

a

Ver

opha

rm

Zent

iva


5. Concluding Remarks

Dr. Igor Krylov, CEO


Investment Case

Leading pharmaceutical company in the most rapidly growing pharma market

Attractive industry fundamentals

Portfolio of market leading brands

Proven product development strategy


Modern and efficient manufacturing facilities

Operational efficiency

Experienced management team


Transaction Highlights

Issuer OJSC “Pharmstandard,” an open joint stock company incorporated under the

laws of the Russian Federation

Securities offered Ordinary shares and GDRs of Pharmstandard 100% secondary shares 15% over-allotment option on GDRs

Selling shareholder Augment Investments Ltd.

Offering structure

Institutional investors Shares and GDRs:

In the US under Rule 144A to Qualified Institutional Buyers (QIBs)Outside US and Russia pursuant to Reg S

SharesRussia

4 GDRs will represent 1 share

Price Range $11.55 – $14.55 per GDR $46.20 – $58.20 per share

Timing Pricing: expected on 3 May Closing: expected on 10 May 2007

Lockup 180 days for the Issuer and Augment Investments Ltd.

Listing locations Ordinary shares listed on MICEX and RTS GDRs listed on LSE

Joint bookrunners and global co-ordinators

Citi and UBS


Appendix


Market Share of Top-10 Companies in theRussian Pharmaceutical Market (% 2006 value)1

Market Share of Domestic Pharmaceutical Producers (% 2006 value)1

Competitive Landscape – Total Market

Source: Pharmexpert, preliminary data (subject to change)Notes:1 Based on sales in wholesale prices2 Pro Forma assumes inclusion of Masterlek as part of Pharmstandard as of 1 January 2006

#4 pharma company in Russia overall#1 domestic pharma company – more than 3

times the size of the #2 domestic player

Other68.7%

Pharmstandard3.1%

Roche2.8%

Gedeon Richter2.6%

Pfizer2.6%

Nycomed2.3%

Servier2.9%

Berlin-Ch/Menarini3.0%

Janssen-Cilag3.2%

Novartis3.8%

Sanofi-Aventis5.2%

Other53.3%

Farm-Centr3.8%

Verofarm Zao3.2%Akrikhin

(Polpharma)3.0%

Biotek2.5%

Materia Medika3.5%

Microgene Npo3.5%

Otechestvennie Lekarstva

4.6%


Pharmstandard15.3%

Moshimfarmpreparaty2.4%

22


Growth Analysis Across Market Segments1

Source: Pharmexpert, 2006 preliminary data (subject to change)

Note:

1 Based on sales in wholesale prices

2 Includes Masterlek with respect to 2006

Dom

esti

c c

om

pan

ies

Inte

rnati

on

al com

pan

ies

Pharmstandard is growing in-line with its peersin the commercial segment


2003

4Q03:

Acquisition of ICN’s business in Russia (five factories, distribution centres and pharmacy chain)

Q104:

New management team brought in with experience in international and domestic pharma companies

2Q04:

Close Polypharm (pharma production facility)

3Q05:

Sale of Marbiopharm (pharma production facility)

Jan 05:

Acquisition of TZMOI (Tyumen)—manufacturer of medical equipment

3Q06:

Acquisition of Masterlek (3.5% share of domestic Russian Pharma market by sales value)

1H05:

Open centralised warehouse for pharmaceutical products in Moscow

Pharmstandard Key Development Milestones

4Q06:

New production of spray, tablets and capsules; central manufacture laboratory and renovation of production facilities

Total investment since 2004: approximately RUR 600m

Leksredstva plant (Kursk)

2H06:

Termination of production in Oktyabr plant in St Petersburg, production transferred to other existing sites

1H06:

New production of solutions, production of vitamins and insulin

Total investment since 2004: approximately RUR 730m

2007:

New production workshops for Rastan® and Phosphogliv®

Ufavita plant (Ufa)

May 2006:

Legal name changed from Biovit LLC to OJSC Pharmstandard

End 2005:

Creation of holding company/ legal restructuring finalised

Pre 2003:

Group consisted of two manu-facturing facilities (Ufa and Phytopharm) operating under Biovit LLC

2004

2005

2006

2007

Source: Company

Note: OJSC – Open Joint Stock Company, LLC – Limited Liability Company


Medical Equipment (TZMOI)

Sterilizers(45% of 2006 sales)2

Medical Equipment(2006 sales RUR 1,196m)1,

14% of group sales in 2006

Aqua distillers(8% of 2006 sales)2

Disposables/Other(47% of 2006 sales)2

Market size approximately RUR700m

Market leader with estimated56% market share by sales value

Growth driven by the Priority National Health Project encouraging investment in new equipment

Market size approximately RUR190m

TZMOI market share estimated at 24%

Market size of syringes approximately RUR3,000m

TZMOI market share about 20%

Portfolio includes syringes, urology bags and catheters

Source: Company estimates

Note:

1 Represents Pro Forma figures which assumes inclusion of Masterlek as part of Phamstandard as of 1 January 2006

2 Based on divisional sales


J01-Systemic Antibacterial0.9%

R02-Throat Preparations1.0%

R05-Cough and Cold Preparations19.9%

V03-All Other Therapeutic Products

1.2%

C01-Cardiac Therapy2.3%

N06-Psychoanaleptics Excluding Anti-Obesity Preparations

1.5%

A02-Antacids, Antiflatulents and Anti-Ulcerants

0.7%

C09-Agents Acting on the Renin-Angiotensin System

0.7%

L03-Immunostimulating Agents2.7%

N05-Psycholeptics3.5%

A05-Cholagogues and Hepatic Protectors

3.6%

J02-Systemic Agents for Fungal Infections

5.7%A11-Vitamins

11.9%

N02-Analgesics17.4%

J05-Antivirals for Systemic Use

18.5%

Other Sales8.3%

Pro Forma Pharma Portfolio by Therapeutic Segment

Pro Forma sales = RUR 8,053 million (2006)

OTC = 83% / Rx = 17%

Pro Forma1 sales split as at 2006

Source: Company

Note:



Sales Team

All sales reps have medical education/work experience

Covers 75% of the Russian pharma market

Incentivised sales force—up to 33% bonus of annual salary

In 2007 looking to:

– Increase “feet on the street” to over 350 sales people

– Further specialise sales force by therapeutic area


Real ti

me d

ata

- E

TM

S

HQ Sales and marketing

National manager1 manager

Regional manager8 managers

OTC sales force(117 medical reps)

Rx sales force(147 medical reps)

National manager2 managers

Regional manager12 managers

OTCRx

(incl. ENDO-Team)

Real tim

e d

ata

- ETM

S

Note: As of 31 December 2006

Source: Company


Breakdown of Sales for 2006 by Distributor

Top 5 distributors accounted for 51% of commercial pharmaceutical product sales in 2006

Typical payment terms for distributors:

– Regional and export distributors: 30–60 days

– National distributors: 60–90 days

– FRP program: 180 days

Source: Company

Note: Manufacturers’ prices

Top 5 Distributors – 2006

Distributor % of sales

Genesis 17

Protek 13

SIA International 11

Katren 5

Infarma Pro 5

Total 51


Production Facilities – Summary Overview

Source: Company. Note: Total capacity for pharmaceutical production in 2006 excludes capacity from Oktyabr factory (St. Petersburg) which closed in Q3 2006

Total capacity calculations assume 8-hour shifts and 7 day working week

Factory Approximate size (sq. m.) Formulation Shifts

Capacity 000’s packs Dec 2005

Capacity 000’s packs Dec 2006

14,900 (lease) Syrops & liquid forms 3 52,644 52,644 Tablets 3 361,077 564,406 Sprays 2 10,368 Powders 2 1,260

LEKSREDSTVA (KURSK)

Capsules 3 16,200

5,850 (lease) Ampules 2 7,624 8,595 Frozen-dried preparation 3 2,640 2,640 Syrops & liquid forms 1 6,360 6,360 Tablets 2 63,012 109,973 Vitamin bars (ferrohematogen) 2 14,000 22,680 Insulin 2 14,400

UFAVITA (UFA)

Saline infusin 2 4,500

1,200 (lease) Ointments 2 11,100 1,200 Powders 1 10,280 10,280 Syrops & liquid forms 2 29,187 24,000

PHYTOFARM (N.NOVGOROD)

Tablets 2 12,850 12,850

29,000 (own) Syrops & liquid forms 1 1,200 1,200 TOMSKHIMPHARM (TOMSK) Tablets 3 206,856 206,856

Closed in 2006 Capsules 2 1,384 Sprays 1 4,582 Tablets 2 72,797

OKTYABR (S.PETERSBURG)

857,593 1,070,412

Syringes 2 295 295 Needles 2 624 624 Sterilizing machines < 100 L 2 24,250 24,250 Sterilizing machines > 100 L 2 319 319

Aquadistilling machines 2 7,320 7,320

TZMOI (Tyumen)


Complivit—#1 Vitamin Franchise

Top-10 Products in Vitamin Segment (2006)

Complivit and its sub-brands

Looking to launch 2 new products under this brand umbrella by the end of 2007

Brand umbrella includes Complivit®, Complivit-Active® and Complivit “mama”®

First launched Complivit in 1986 and followed on with Complivit-Active® and Complivit “mama”® by the end of 2004



63.1 81.2 91.0 102.5136.4 148.1

16.718.5

19.3

26.827.6

14.7

3.414.04

4.434.98

5.395.88

0

50

100

150

200

250

2001 2002 2003 2004 2005 2006

Sale

s (U

S$m

)

0

1

2

3

4

5

6

7

Average price (U

S$)


Source: Company


Vitrum Vision (Unipharm)2.4%

Complivit (Pharmstandard)11.5%

Vitrum (Unipharm)6.6%

Supradyn (Bayer)4.8%

Centrum (Wyeth-Whitehall)4.6%

Merz Spezial Dragees (Merz)3.8%

Elevit Pronatal (Bayer)3.8%

Biovital Gel for Children (Bayer)3.4%

Vitrum Beauty (Unipharm)2.9%

Vitrum Prenatal Forte (Unipharm)3.2%

Other53.0%


Terpincod®/Codelac®—#1 Cough and Cold Franchise

Terpincod®

First launched Terpincod® in 1996

Non-promoted brand with high margins

Codelac®

Includes Codelac® tablets and Codelac Phyto® syrup

First launched Codelac® tablets in 1996 and followed with Codelac Phyto® syrup in 2004

Source: Pharmexpert, preliminary data (subject to change)Note: Based on consumer prices

Source: Company

Top-10 Products of Antitussive & Expectorants Segment (2006)


63.987.8

114.0 121.2156.1

176.213.6

26.235.2

40.1

46.3

8.4

1.22

0.46

1.02

0.830.67

0.52

0

50

100

150

200

250

2001 2002 2003 2004 2005 2006

Sale

s (U

S$m

)

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Average price (U

S$)



Ascoril Expectorant (Glenmark)

3.0% Hedelix Syrup Cough Control (Krewel Meuselbach)

3.2%

ACC (Sandoz)3.3%

Lasolvan (Boehringer Ingelheim)

10.6%

Ambrobene (Ratiopharm)

6.5%

Doktor Mom (Unique

Pharmaceutical)5.3%

Pulmozyme (Roche)4.5%

Codelac (Pharmstandard)

5.3%

Bromhexine 8 Berline-Chemie

(Berlin-Ch/Menarini)2.9%

Terpincod (Pharmstandard)

14.3%

Other41.0%


In-depth analysis of potential cough/cold drug development opportunities

Marketing/medical review of compounds/possible compositions

Maxicold® Case Study

May 2004Stage 1

Marketing request

Jun-Aug 2004Stage 2

Internal expertise for production and technology,

availability of active ingredients

Aug 2004Stage 3

Project management, approval by GM

Sep-Dec 2004Stage 4

Development of production and Regulatory filing

Jan 2005-Jul 2005Stage 5

Milestones of Regulatory stage

Review of production capability and capacity

Agreed PHS-Leksredstva was to be production location

Production team put together (technologist, registration mgr., procurement mgr.), project approved by GM

Experimental / production equipment tests

Production development

Pre-clinical studies

Development of regulatory file

1st submission to Ministry of Health: 28-Jan-05

2nd submission (Pharmaceutical and Pharmacological Committees): 10-Mar-05

Clinical review completed: 19-Jul-05

Labelling approved: 07-Dec-05

Registration certification received: 26-Feb-06

License for production received: 27-Jul-06

Source: Company


Source: Company

Passifit® Case Study

Production started in July 2006

First commercial sales commenced in September 2006

– Line extensions include new formulations e.g. tabs and pediatric

Actively promoted in January 2007

– Specialist doctors (e.g. gynecologists), general practitioners and pharmacists

Priced at a discount to key competitor product Novo-Passit

Growth expected to be achieved through increasing market share


Complivit Calcium D3® Case Study

October 2004Stage 1

Nov-Dec 2004

Stage 2

January 2005Stage 3

Jan-Feb 2005Stage 4

March 2005Stage 5

January 2007Stage 6

April 2007Stage 7

Development of production and regulatory filing

Submitted to Ministry of Health

Registration approved

Production

Marketing request

Internal expertise for production and technology, availability of active ingredients Project management, approval by GM


Documents

Roadshow Presentation 0 April / May 2007 Roadshow Presentation Initial Offering — Roadshow Presentation