Novartis is planning to build a new full-scale pharmaceutical manufacturing plant in St Petersburg as part of its strategy of expansion in Russia.

Construction on the new facility, which is expected to manufacture both high-quality branded generics as well as pharmaceuticals, is scheduled to start in 2011 and the plant will produce some 1.5 billion units per year. The Swiss major noted that the investment is part of an overall $500 million commitment in "local infrastructure and collaborative healthcare initiatives planned over a five-year period".

As well as the new facility, Novartis said it plans collaborations with both universities and academia, "but also with emerging Russian private business in different areas of medical science". These projects could include out-licensing compounds to Russian companies "with proven scientific capabilities, in-licensing and scouting for promising drug candidates from Russian scientists and universities and modelling and simulation activities for clinical trials". Novartis added that it has made a commitment to double its investments in drug development in clinical trials in Russia and expects to enroll 4,000 individuals by 2013.

Chief executive Joe Jimenez said the firm is making a strategic investment in Russia for long term growth. and the moves show "our commitment to contributing to the ambitious healthcare goals of the Russian government". It also "enables us to expand our commercial presence in a key emerging market".

Novartis is keen to work with the Russian government, whose prime minister Vladimir Putin recently warned multinational drugmakers that they will face restrictions if they do not develop production and transfer technology in the country. Relations between the Basel-based group and the Kremlin seem pretty healthy, given that the company is the only pharmaceutical business in Russia's Foreign Investment Advisory Council and is establishing public health partnerships with federal and regional health authorities.