Azamat Metov: "Our Case is About How Things Can Be Non-linear"

General Director of Farm Aid Azamat Metov on the Strategy to Conquer the Domestic Vaccine Market

In October, Russian epidemiologists once again raised the issue of expanding the National Calendar of Preventive Vaccinations (NCPV). Currently, it includes 12 diseases, but several dangerous diseases, such as meningococcal infection, chickenpox, human papillomavirus, and rotavirus, are not covered by the calendar. There have been no significant updates to the NCPV in recent years, except for the addition of anti-COVID-19 products, although the Russian Ministry of Health is actively discussing the development of the state vaccine procurement market. Farm Aid is building its strategy based on active participation in the National Calendar. Last year, the manufacturer acquired the rotavirus vaccine technology from the Indian Serum Institute and registered it in Russia, and then announced large investments in building its own plant near Kaluga, where the production of foreign developments will be transferred. Azamat Metov, General Director of Farm Aid, shared with Vademecum publisher Dmitry Kryazhev how the international business project is developing in the new market realities.

– "Farm Aid" has been around for five years. But it’s only this year that people started talking about the company after you acquired the “Novamedika” site in the Kaluga region. What led to this event?

– It all started after Rostec began focusing on the production of immunobiological products.

– That was back in 2013, when “Natsimbio” was created.

– Correct. There were several priority development vectors simultaneously. In particular, it was decided to find technological partners capable of transferring the technology for the production of complex drugs on a full cycle. It took time to find competent allies. During the negotiations, the Dubai-Singapore fund Ishvan Pharmaceutical, which had experience in the biotech field, helped. Together with “Natsimbio,” the fund established Farm Aid Ltd in 2017, and we began actively searching for technology donors. Negotiations were held with both Western and Asian companies.

– And were European companies willing to share their know-how? Usually, there are problems at this stage, and delegation of production authority doesn’t go beyond packaging.

– Yes, we also encountered the fact that Western companies were not willing to transfer full-cycle technologies to Russia, and if someone did express willingness, the price and terms were simply unacceptable. Ultimately, we chose to collaborate with the Indian Serum Institute. Time has shown that this was a successful choice. It is the largest vaccine manufacturer in the world with an annual production volume of over 2 billion doses. However, even with such support, it was not guaranteed that the project would be completed. We spent a year dealing with documentation, aligning it with Russian requirements, preparing clinical trial designs, and selecting centers for them. In 2018, Farm Aid began clinical trials and registration of the rotavirus vaccine. We received the registration certificate in 2021.

– Meanwhile, I know that Farm Aid was also involved in selecting a production site and looked at many options.

– You wouldn’t believe it! We spent a couple of years examining everything built since 1960.

– And the geography and selection criteria?

– Dozens of potential sites where live viral vaccines could be produced, from Kaliningrad to Sakhalin.

– And none were suitable?

– Let’s attribute this to our meticulousness and the specificity of the product. However, there was no existing site in Russia that could accommodate the technologies of our foreign partners in accordance with all global and Russian GMP requirements. If our selection results are needed by colleagues, I’m ready to share our observations. In general, we decided to build our own plant from scratch. The only question remaining was location. Initially, we chose the Dubna special economic zone in the Moscow region, conducted negotiations, and obtained the necessary permits. We were allocated a 2.5-hectare plot and began designing the plant.

– Wait, you’re actually building near Kaluga.

– Our case is actually about how things can be nonlinear, even with clear, specific goals. If we don’t delve too deeply into the history, the option for the site in Kaluga arose spontaneously. Yes, we were working on Dubna, but we were also tempted to look at the “Novamedika” site near Kaluga. It turned out that by buying the “Novamedika” site, we could save a year and a half on obtaining technical conditions, permits, and infrastructure. It was easier for us to make changes to our documentation to speed up the process. The site in Kaluga presented a different challenge. While in Dubna we planned a compact plant with one line occupying about 10,000 square meters of usable space, the Kaluga site is 2.5 times larger.

– That’s a different economy. How will you cover the costs?

– Speed became the main goal. And we adjusted the entire business plan for that. We negotiated with partners and agreed to expand the product portfolio – adding a pentavalent meningococcal vaccine and a quadrivalent vaccine for the prevention of human papillomavirus using the same full-cycle technology transfer principles as before. And that’s not all. In the future, the company plans to expand its portfolio with immunobiological products, mainly immunoglobulins against various infectious diseases.

– Did you have to significantly revise the project to suit your needs?

– In September 2021, we closed the deal and since then have been busy redesigning the plant. We are working with the Russian-Austrian company “Ceta.” The designers are adapting the partners' technological solutions to our site. Construction work is more than 40% complete.

The plant will produce 3.5 million doses of rotavirus vaccine annually, which will cover Russia’s need for this product. Overall, the site will be able to produce up to 13 million doses of vaccines per year if operated in two shifts.

– How much are you investing in the plant?

– We estimate that the construction will cost 9 billion rubles. The total budget, including the launch, registration, and market introduction of new products, and other operational expenses, will be significantly higher.

– This year, Rostec exited from Farm Aid. Has your now sole shareholder revised the strategy?

– We are talking about quite significant capital investments in the construction of the plant. Of course, Ishvan Pharmaceutical has legitimate investor concerns: objective risks must be mitigated by guarantees of product realization. Expanding the National Calendar of Preventive Vaccinations will provide the necessary confidence in the future. By the way, we are actively conveying our position to regulatory authorities, and they are listening to us. If rotavirus infection is included in the National Calendar in 2023, we will be able to promptly complete the construction of the site and localize production in Russia within three to four years. Our agreements include obtaining full rights to transfer production technologies for the necessary products to the country, which will be produced under contract in India until the plant is commissioned.

– By the way, why start with the rotavirus vaccine?

– Rotavirus infection incurs significant economic losses – it impacts the healthcare system, the compulsory medical insurance system, and involves direct costs. When a child contracts rotavirus, it disrupts the whole family, leading to losses for employers, and this results in indirect costs. Annual vaccination of newborns could reduce these costs by 45 billion rubles per year. To bring this figure to an effective “zero,” the government needs to spend 4 billion rubles annually on vaccination. And let's not forget that there are cases of death from this infection, which can be controlled preventively through vaccination. Moreover, our product is twice as cheap as “big pharma” counterparts. We saw that many regional consumers previously declined vaccination due to cost. With our vaccine entering the market, the demand for this type of vaccination has emerged. We covered 90% of the Russian market this year. We had trial deliveries to Belarus this year. Next year, we plan to sell our vaccine in all EAEU countries.

– Were there any problems with logistics? In spring, there was no proper communication, including with India.

– There were problems, but not critical ones. We just switched airlines. However, geopolitics does affect all international projects, and ours is no exception. For example, we are currently addressing the issue of replacing technological equipment, fortunately, we are at the design stage. For instance, Serum Institute uses German equipment, which is currently unavailable to us. Initially, we planned to install European-made equipment, but now we are shifting to Asian manufacturers, primarily from friendly countries like India and China. We were able to find similar items at lower costs. We are also planning to include a separate workshop with 3D printers and lathes in the plant design so that minor repairs can be done on-site without long waits for spare parts.

– You mentioned that the plant will be launched in three years. That’s a relatively short time. Have you already addressed staffing issues?

– The staffing plan is mostly ready. The plant will employ 250 people. To ensure we recruit the right personnel, we have agreements with universities in Moscow, St. Petersburg, and Obninsk. Students from the third year will be able to intern at the Farm Aid production site. And, of course, we are searching for the best talent in the market. For training and upgrading the skills of specialists, staff from Serum Institute will assist us. This condition is also included in the international agreements.

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