latvia’s biopharma industry – competitive location of...

Latvia’s Biopharma industry – Competitive location of Regional R&D and business

DRAFT version January 16, 2004

Latvia’s Biopharma industry DRAFT version, 16th January, 2004

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Latvia’s Biopharma industry – Competitive location of Regional R&D and business

Table of contents

1. Global market trends for Biopharma sector.........................................................10

1.1. Pharmaceutical industry...............................................................................10 1.2. Biopharma....................................................................................................11 1.3. Medical equipment and IT ...........................................................................13

2. Development and characteristics of the biopharma sector in Latvia ...................19 2.1. General.........................................................................................................19 2.2. Output ..........................................................................................................21 2.3. Export...........................................................................................................23 2.4. Employment.................................................................................................29 2.5. Foreign investment attraction ......................................................................31

3. Local and regional demand pattern......................................................................33 3.1. Global outlook .............................................................................................33

3.1.1. Pharmaceuticals ...................................................................................33 3.1.2. Medical devices ...................................................................................33

3.2. Baltic Sea Region outlook ...........................................................................35 3.2.1. Medicon Valley....................................................................................35 3.2.2. Sweden.................................................................................................36 3.2.3. Finland .................................................................................................37 3.2.4. Denmark...............................................................................................38 3.2.5. Poland ..................................................................................................39 3.2.6. Estonia..................................................................................................39 3.2.7. Lithuania ..............................................................................................40 3.2.8. Russia...................................................................................................41

4. Innovation in Latvian biopharma sector ..............................................................43 4.1. Entrance of new specialists & education curricula ......................................43

4.1.1. Pharmacy..............................................................................................46 4.1.2. Biomaterials & Organic chemistry ......................................................48 4.1.3. Medical engineering.............................................................................49 4.1.4. Environment & Biotechnology............................................................52 4.1.5. Food Biotechnology.............................................................................53

4.2. Programme for Universities Reform............................................................54 5. R & D Institutions................................................................................................56

5.1. Financing of academic science and R&D....................................................56 5.2. R&D financing and performance indicators among Biopharma related areas 57

5.2.1. Latvian certified laboratories ...............................................................63 5.3. Legal framework & IP rights .......................................................................65

5.3.1. Legislation on medicines .....................................................................65 5.3.2. Gene research legislation .....................................................................66 5.3.3. IP protection in Latvia .........................................................................67

5.4. Technology transfer and co-operation links ................................................69 6. Industry and main sub-sectors .............................................................................72

6.1. Manufacture of finished forms and generics ...............................................72 6.2. Manufacture of active pharmaceutical ingredients ......................................73


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6.3. Manufacture of injectibles ...........................................................................73 6.4. Cosmetics & fitopreparations ......................................................................74 6.5. Telemedicine................................................................................................76 6.6. Biomedical equipment production...............................................................76 6.7. Biotechnology services ................................................................................77 6.8. Drug approval & clinical trials ....................................................................78 6.9. DNA manipulation services.........................................................................78 6.10. Other smaller sub-branches......................................................................79

7. Areas for potential investments ...........................................................................80 7.1. Potential growths areas of future biopharma R&D capacity .......................80 7.2. Particular areas for potential investments ....................................................81

7.2.1. Human Genome Program in Latvia .....................................................84 7.2.2. Programme for biofuel production.......................................................86

8. Conclusions..........................................................................................................88 9. Suggestions for further sector development ........................................................89 10. Appendix 1. Company Profiles........................................................................91

10.1. ALFA VET LLC......................................................................................91 10.2. Amerikas-Baltijas Tehnoloģiju Korporācija LLC ...................................92 10.3. Amerilat JSC............................................................................................93 10.4. ANK LLC ................................................................................................95 10.5. ARBOR Medical LLC .............................................................................97 10.6. ASLA LLC...............................................................................................98 10.7. BALTIC BIODIESEL LLC...................................................................100 10.8. Baltic Instruments LLC..........................................................................101 10.9. BALTICTRONS LLC ...........................................................................103 10.10. BioEFEKTS LLC...................................................................................104 10.11. BIOSAN LLC ........................................................................................106 10.12. BIOTEHNISKAIS CENTRS JSC .........................................................108 10.13. DELTA - RIGA LLC.............................................................................110 10.14. DOCUMED LLC...................................................................................111 10.15. ELMI LLC .............................................................................................113 10.16. FITOSAN LLC ......................................................................................115 10.17. GENERA LLC.......................................................................................116 10.18. GRINDEKS PJSC..................................................................................117 10.19. INTEGRIS LLC.....................................................................................122 10.20. INVITROS LLC ....................................................................................124 10.21. KALCEKS JSC......................................................................................126 10.22. LARIFANS LLC ...................................................................................129 10.23. LEMIS BALTIC LLC............................................................................132 10.24. MEDEKSPERTS LLC...........................................................................134 10.25. MEDPRO INC. LLC .............................................................................135 10.26. OLAINFARM JSC ................................................................................137 10.27. RĪGAS FARMACEITISKĀ FABRIKA JSC ........................................140

11. Annex 2. Profiles of leading researchers .......................................................142 11.1. Latvian University A. Kirhenšteins Microbiology and Virology institute 142 11.2. Latvian Institute Of Organic Synthesis..................................................143 11.3. Institute of Biology ................................................................................147 11.4. Institute of Microbiology and Biotechnology........................................148 11.5. Research Centre "Sigra" ........................................................................150


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11.6. Biomedical Research and Study Centre.................................................152 11.7. Institute of Experimental and Clinical Medicine ...................................153 11.8. Institute Of Biomedical Engineering And Micro Technologies ............154 11.9. Latvian State Institute of Wood Chemistry ...........................................155

12. Annex 3. The most important research areas.................................................156 12.1. Agricultural and Biosystems Engineering .............................................156 12.2. Food Science and Human Nutrition.......................................................156 12.3. Health and Human Performance............................................................156 12.4. Biochemistry, Biophysics and Molecular Biology ................................157 12.5. Biomedical Sciences ..............................................................................157 12.6. Natural Resource Ecology and Management.........................................158 12.7. Chemical Engineering............................................................................158 12.8. Veterinary Microbiology and Preventive Medicine ..............................159 12.9. Microbiology..........................................................................................159 12.10. Biotreatment of wood resources ............................................................160


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List of Tables, Figures & Inserts

Tables

Table 1 Global pharmaceutical sales in 2000 by region ..............................................10 Table 2 Leading therapy classes in 1999 global pharmaceutical sales........................11 Table 3 Key data of biopharma related industries 2002 ..............................................20 Table 4 Productivity level in biopharma related industries, 2001 ...............................29 Table 14 FDI track record in Latvian Biopharma sector, 2003 ...................................31 Table 5 Characteristics of Stockholm’s Bioregion potential .......................................37 Table 6 Relevance & variety analysis..........................................................................44 Table 7 Evaluation of acadiemic capacity at the universities in 2003.........................45 Table 8 Programme for Universities Reform, estimated results..................................55 Table 9 Main Institutions and their scientific staff related to Biopharma sector in 2003

..............................................................................................................................59 Table 10 Nationally certified Labs ..............................................................................63 Table 11 Products developed at Latvian Institutions for productions sector...............70 Table 12 Biopharma cluster infrastructure analysis matrix .........................................80 Table 13 R&D Investment projects .............................................................................83

Figures Figure 1 Distribution of manufacturing output among sectors in 2002.......................19 Figure 2 Structure of Chemicals, pharmaceutics & detergent production sector in 2002

..............................................................................................................................20 Figure 3 Output and value added share in biopharma related industries, 2001...........21 Figure 4 Industrial output of pharmaceuticals (NACE 244) production sub-sector,

1991-2002 (EUR).................................................................................................21 Figure 5 Industrial output of medical devices (NACE 331) production sub-sector,

1991-2002 (EUR).................................................................................................22 Figure 6 Industrial output of detergent & cosmetics (NACE 245) production sub-

sector, 1991-2002 (EUR) .....................................................................................22 Figure 7 Industrial output of other chemicals (including gelatine & essential oils,

NACE 246) production sub-sector, 1991-2002 (EUR)........................................23 Figure 8 Export content in biopharma related sub-sectors in 2002 .............................24 Figure 9 The highest & the lowest export content in selected Biopharma sub-sectors

in 2002 .................................................................................................................24 Figure 10 Export dynamics in biopharma related industries and comparison with total

export trend ..........................................................................................................26 Figure 11 Change in foreign markets of biopharma related industries........................27 Figure 12 Export of medical equipment by country in 2002.......................................27 Figure 13 Export of organic chemicals by country in 2002.........................................27 Figure 14 Export of pharmaceuticals by country in 2002............................................28 Figure 15 Export structure of organic chemicals in 2002............................................28 Figure 16 Labour productivity (Turnover/Employees)in selected Biopharma sub-

sectors in 2002, thsd. EUR...................................................................................30 Figure 17 Biopharma sector relevant students within 10 years ...................................43 Figure 18 Number of students by disciplines relevant to Biopharma in 2003.............44 Figure 19 Number of students dedicated to Pharmacy, Biomaterials & Organic

Chemistry.............................................................................................................46


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Figure 20 Number of students dedicated to Medical Engineering ..............................50 Figure 21 Number of students dedicated to Environment & Biotechnology...............52 Figure 22 Number of students dedicated to Food Biotechnology ...............................53 Figure 23 Distribution of state financing among basic research areas in 2003 ...........57 Figure 24 Distribution of state financing among R&D institutions in 2003................57 Figure 25 Distribution of state financed market oriented researches in 2003 .............58 Figure 26 Distribution of state financed market oriented researches among R&D

institutions in 2003...............................................................................................59 Figure 27 Number of SCI citations among biopharma related areas, 1975- 2001 ......60

Inserts Insert 1 Programme for Universitu Reform & new centres of doctorants ...................54 Insert 2 Sixth Framework Program of EU (6-IP).........................................................56 Insert 3 New drug invention, technology transfer and track record of Institute of

Organic Synthesys ...............................................................................................69 Insert 4 Genome projects in the world.........................................................................84 Insert 5 Production of bio-fuel in EU ..........................................................................86


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Executive summary This report assesses current situation as well as the strengths and weaknesses of the Biopharma sector in Latvia. Report includes analysis of potential growths areas of future biopharma R&D capacity and analysis of R&D intensive products / services export growths potential. Finally this material encloses assessment of foreign investment attraction to Biopharma sector. While analyzing the Biopharma sector several sub-branches and related branches were surveyed. The sub-branches of industry surveyed are as follows: production of pharmaceutical elements and preparations, detergents, chemicals, medical equipment and instruments, health care & clinic services, waste recycling, production of energy, water purification. In addition also the wholesale & distribution of Biopharma products was analyzed. Special attention was paid to scientific researches, educational institutions and the correspondent sub-branches of environment and health protection that ensure and support the development of Biopharma sector. As a result Biopharma industry sector study focusing in particularly on: • education system, • related R&D services, • biotechnologies, • design and production of biologically active natural substances, • pharmaceuticals, medicines, incl. generic production, • services, incl. clinic services, synthesis of intermediates, • biotreatment of wood resources. Following the results of the investigation the industrial output of Biopharma at present is at EUR 70 million value (year 2002 data), which is 0.81 % per cent of GDP. Theoretically, the Biopharma production sector could be classed as the ninth greatest at the rate of industrial output. This is a conditional assumption, since the Biopharma sector is not classed as a separate sector statistically. In Latvia the most significant output of the Biopharma sector is ensured by the production of pharmaceuticals & medicines (EUR 38.2 million), production of lab & medical equipment, production of biotech oriented technologies and biopharma related services (EUR 8.6 million), production of perfumes & cosmetics (EUR 14.3 million). In less extent in output contribute production of basic organic chemicals (EUR 4.7 million). Main export markets are Baltics, CIS and western countries in less extent. Overall the Biopharma production and service sector employs around 3730 specialists, about 1110 of which are the senior experts and researchers. About 50 per cent of the employees work in the production of pharmaceuticals & medicines sector. But the total number of experts working in the Biopharma R&D sector at present is around 1830, 40 per cent of which are senior researchers. Like other sectors the Biopharma sector experienced significant staff reduction, that was due to the changes of the structure of economics in the beginning of the 1990s. The R&D sector experienced the most significant staff reduction; the number of the staff was reduced


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three times. To a lesser extent the staff reduction affected the production sector where the number of the employees has been cut around one and half times since 1990. Interestingly that, in spite of the painful stuff reduction, in general the Biopharma sector managed to maintain its spheres of activity, in contrast to many other sectors. It can also be seen by looking at the fact, that the number of research and educational institutions has not dropped since 1990; then there were 16 institutions; whereas in 2003 there are 23 of such institutions. The largest R&D institutions in Biopharma are Latvian Institute of Organic Synthesis, University of Latvia Institute of Microbiology and Biotechnology, Institute of Biology and University of Latvia Biomedical Research and Study Centre. At present there are less companies then there were in 1990, but then there is a positive tendency that in the past 5 years alongside with the great companies also a number of SME and spin-off companies have been developing very successfully. Major companies are Grindeks, OlainFarm and MedPro, all of them producers of generic pharmaceuticals and intermediate pharmaceutical products. The BioSan and ELMI companies (producers of lab equipment) and Biotechnical Centre (producer of bioreactors) most probably are the best example of the fast-growing, innovative and new companies. Amount of attracted FDI in whole Biopharma sector, including services and trading, is modest - about EUR 20 millions, of which manufacturing absorbed about EUR 7.6 millions (40%). The rest of FDI went to distribution and wholesale sub-sector. The biggest investment cases regard to both in Stock Exchange quoted companies, i.e. Grindeks and Olainfarm. Activity of strategic investors in Biopharma sector is still small. The most important and recent investment has been made by Grant Laboratories (UK). Strengths of the sector: Presence of well – equipped and experienced companies in field of the production

of generic pharmaceuticals and intermediate pharmaceutical products, Brands that are recognized in the Latvian, Baltic, Russian and CIS markets, Existing and extensive R&D base and good co-operation between industry and

scientific sectors, covering following spheres of research: microbiological synthesis, wood chemistry, vyrology, synthesis of physiologically active substances, bioorganic chemistry, molecular biology, genetics, biotechnology, biomechanics, magnetobiology and other.

Availability of skills and production capacity for synthesis, chemical analysis, physical chemistry, analytical chemistry, pharmacology, toxicology, development of methodology, small scale production, large-scale production, and there exist good clinical hospitals

Supplementary skills from engineering and ITC sectors making prospects for medical and biotech equipment production, telemedicine and bioinformatics.

Cost-efficiency compared to Western markets. Weaknesses of the sector:


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Lack of management and marketing capability necessary to capture western markets, difficult recognition of Latvian products in Western markets,

Lack of financial for new product approval for the Western markets, Slow entrance of new specialists and ageing of senior researchers, Limited market for the clinical tests, Small local market and low purchasing power, Weak local IP protection framework, limited international recognition of local IP

authorities, Lack of financial resources for development generally and absence of risk capital

funds. The most promising areas identified by this study New drugs and active pharmaceutical ingredients Veterinary preparations Bioreactors Medical equipment Biotreatment of wood Biofuel & bioethanol Health Information Systems, Lab Information Systems Lab tests, DNA tests, analzation of lab material Clinic test performance for Stage I & II Human Genome Research programme


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1. Global market trends for Biopharma sector

1.1. Pharmaceutical industry

The pharmaceutical industry is complex, dynamic, and highly globalized, with many pharmaceutical companies operating in multiple countries. Adding to the international nature of the industry, there is a continued trend toward outsourcing various stages of the development and production of a single pharmaceutical product, including intermediate and active ingredient process development; as a result, a single finished product may be the result of materials manufactured in more than one country. In addition to its global aspect, the pharmaceutical industry continues to be characterized by high R&D expenditures and extensive regulation of its products compared with other manufacturing sectors. The most established pharmaceutical industries are located in the United States, Western Europe, and Japan. The top 10 pharmaceutical companies based on worldwide sales in 2002 are headquartered in either the United States or Western Europe. While no Japanese firms are among the top 10 companies, several firms fall in the next tier of top worldwide pharmaceutical sales. The US remains the largest pharmaceutical market by far, growing 17% to EUR130.1 billion in sales in 1999, and representing 39% of the total worldwide market. Japan, the second largest market, recovered last year from three consecutive years of negative performance, growing 23% with sales of EUR53.5 billion. Within the top five European markets, Germany remains in the lead, achieving sales of EUR18.5 billion with 1% growth over 1998. The fastest growing Western European markets in 1999 were the UK, growing 8%, and Spain, with 6% growth over 1998. Based on reports of growth rates of over 10 percent for 1997, and estimates of similar growth for 1998, the pharmaceutical industry appears to be performing well.4 A recent review of the major pharmaceutical companies reveals several factors contributing to the success of the industry on a worldwide basis.5 Improved R&D productivity has brought recent opportunities for growth, and many contend that consolidation and restructuring have also been beneficial for pharmaceutical companies.

Table 1 Global pharmaceutical sales in 2000 by region World Audited

Market 2000 Sales (EUR

Bn) % Global

Sales % Growth Year-over-

Year* North America 152.8 48.2% 14% Europe 75.3 23.7 8 Japan 51.5 16.2 3 Latin America 18.9 6.0 9 Asia, Africa and Australia 18.7 5.9 10

TOTAL EUR 317.2 100% 10% Source: World Review 2001

The top ten therapy classes accounted for nearly 30% of the total world market in 1999. Four out of the leading ten - Cholesterol & Triglyceride Reducers,


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Antirheumatic Non-Steroidals, Antipsychotics and Oral Antidiabetics - are growing at 20% or more, year-over-year.

Table 2 Leading therapy classes in 1999 global pharmaceutical sales

Rank Therapy Class

1999 Sales EUR Bn

% Global Sales

% Growth Year-on-

Year*

1 Antiulcerants 15.8 5.3% 12% 2 Cholest & Triglyceride Reducers 13.4 4.5% 21% 3 Antidepressants 11.7 4.0% 17% 4 Calcium Antagonists Plain 9.9 3.3% 4% 5 Antirheumatic Non-Steroidals 7.7 2.6% 23% 6 ACE Inhibitors Plain 7.4 2.5% 5%7 Cephalosporins & Combinations 7.3 2.5% 4% 8 Non-Narcotic Analgesics 6.2 2.1% 1% 9 Antipsychotics 5.1 1.7% 26% 10 Oral Antidiabetics 4.8 1.6% 22% 11 Leading 10 ATCs at Level 3 89.3 30.2% 13%

Source: IMS HEALTH World Review 2000 The state of the biotechnology industry, widely considered one of the most rapidly developing research areas within the pharmaceutical sector, is assessed as evidence of an industry’s ability to invest in risky R&D activities and successfully commercialize the scientific findings.

1.2. Biopharma The discovery of recombinant DNA and monoclonal antibody technologies in the 1970s marked the birth of the biopharmaceutical industry. Biopharmaceuticals are complex macromolecules derived from recombinant DNA technology, cell fusion, or processes involving genetic manipulation. They include recombinant proteins, genetically engineered vaccines; therapeutic monoclonal antibodies; and nucleic acid based therapeutics (i.e. DNA based drugs), including gene therapy vectors. Unlike orally delivered small molecule drugs that underpin the traditional pharmaceutical industry, biopharmaceuticals are usually administered by subcutaneous, intravenous, or intramuscular injection. The first drug produced via genetic engineering was human insulin which appeared on the market in 1982. By mid-2000, 84 biopharmaceuticals had been approved for marketing with almost half launched during the past three years. Worldwide sales have grown more than seven-fold over the past decade to reach EUR15 billion by 1998. The US represents 46% of the market, compared to 36% for conventional drugs, due to a combination of earlier regulatory approval, easier market acceptance, and greater pricing flexibility than other countries. Although biopharmaceuticals comprise only 5% of world prescription drug sales, they account for six of the top 50


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selling drugs, 13% of new medicines approved by the FDA in the 1990s and about 18% of all drugs in development. At the end of 1999, there were 369 biotechnology drugs in US clinical development against 438 disease indications with 25% in Phase III. Modern drug discovery is built on four core technologies: genomics (source of novel targets), combinatorial chemistry (source of molecules that interact against those targets), high-throughput screening (testing one against the other); and bioinformatics which is crucial to the analysis of the vast amounts of data generated. While current pharmaceuticals are active against some 500 biological targets, genomics is expected to lead to the identification of up to 10,000 new targets for development. Whether these will be amenable to small molecule intervention or require protein and nucleic acid based therapies remains to be seen. Despite the heavy investment in genomics, only a handful of genomics-based drugs (defined as those based on the identification of an unknown gene sequence followed by elucidation of its function and therapeutic potential) have reached the clinical stage. All are protein drugs. Products and Markets By mid-2000, 84 biopharmaceuticals had been approved for marketing with almost half launched during the past three years. Worldwide sales in 1998 totalled EUR15 billion. Although representing only 5% of world prescription drug sales of EUR300 billion, biopharmaceuticals comprise six of the top 50 selling drugs, 13% of new medicines approved by the FDA in the 1990s, and 11% of all drugs in development. The US is the largest and most rapidly growing market, accounting for 46% of sales, compared to 36% for conventional prescription drugs, reflecting a combination of earlier regulatory approval, easier market acceptance and greater pricing flexibility. Europe and Japan are the next most important markets, accounting respectively for 30% and 17%. Industry Size There are approximately 3,000 dedicated biotechnology companies worldwide employing 230,000 people with the US accounting for 40% of firms and 70% of employment. Publicly traded firms - including an estimated 100 that floated IPOs during 2000 - number approximately 460 of which 74% are based in the US and 18% in the EU. The segment involved in biopharmaceuticals numbers about 150 firms. Only a handful of biotech firms - primarily those involved in biopharmaceuticals- have a product on the market. The industry as a whole continues to experience major losses because of high R&D costs. The largest and most successful (e.g. Amgen, Chiron, Biogen and Genentech) are mainly US based. With the exceptions of Serono (Switzerland), Celltech (UK), and Bio-Technology General (Israel), few non-US firms have brought a biopharmaceutical to market, reflecting their later startup dates. The total market capitalization of all public European biotechnology companies, for example, is only a little larger than Amgen. Japan has few dedicated biotechnology companies, with the industry primarily consisting of large food and pharmaceutical firms with historic strengths in fermentation attempting to diversify into biopharmaceuticals. Industry Structure The biotechnology industry consists of three groups: dedicated biotechnology firms, usually university spinoffs, researching disease mechanisms at the molecular level; traditional pharmaceutical companies ("big pharma") marketing drugs developed by biotechnology firms; and a specialized tier of companies serving both the pharmaceutical and biotechnology industries with platform technologies that


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can speed up the drug discovery process or improve drug delivery. The boundary between these three groups has blurred. Big pharma is investing heavily in molecular biology and genomics, biopharmaceutical firms are moving into small molecule therapeutics because of production and delivery advantages, and platform companies are entering the drug development field because of the prospects for higher returns.

1.3. Medical equipment and IT The total worldwide market reached EUR145 billion last year. The United States (market value EUR61 billion) is among the top three markets for medical devices, followed by Europe and Japan, which had approximately EUR39 billion and EUR21 billion in 1998 sales, respectively. Despite continuing pressure to contain costs, reimbursement challenges, mergers and acquisitions, and the economic crisis in Asia, the U.S. market for these products is growing at a 6% compound annual growth rate. According to the Health Industry Manufacturers Association (HIMA), this growth appears to be sustainable for at least the next two years. Growth rates for the medical technology markets in other countries with expanding economies—including Brazil, China, Korea, India, Taiwan, and Mexico—are higher than that of the United States, at approximately 15% overall (China is the world's fastest-growing medical device market, with 28% annual growth in recent years). By the year 2000, the world's emerging markets are expected to represent 17% of total medical sales, rising to approximately 25% by 2005. The total medical device market in 2006 is expected to be EUR260 billion. Products included in the medical device category include disposable medical supplies such as medical kits and trays, infusion and related supplies, diagnostic and lab products, and wound-management supplies, as well as capital equipment, instrumentation, and other related products. In general, the markets for all medical products with application to the growing elderly population in the United States and the world, as well as markets offering products that improve outcomes while reducing costs, are growing and offer great opportunities for success for manufacturers. In Vitro Diagnostics As an example, the worldwide in vitro diagnostics (IVD) market is one of the largest in the medical instrumentation field, valued at more than EUR22 billion in 1998 (this total includes the research, industrial, and animal health segments). Several emerging sectors in this market—such as molecular diagnostics and nucleic acid probes, blood glucose monitors, and point-of-care tests—are forecast to show solid growth into the next century. As a result of the discovery of new disease markers, the immunoassay market will also contribute to further market expansion, albeit more modestly. Longer term, market drivers point to increasing—if not accelerating—demand. The volume for worldwide IVD testing will grow because of several fundamental driving forces, some of which are rather predictable. Current demographic trends in industrialized countries (the aging population) and a gradual rise in healthcare


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spending in emerging markets will increase demand for diagnostic testing. Also driving demand are the growth of alternate-site care and the associated expansion of secondary markets, such as the home and physician's office. The new economic reality of managed care, with its emphasis on early detection and treatment of illness, is creating additional demand for patient knowledge that will translate into a need for more diagnostic testing. This demand ties in with another driver: the growing interest of pharmaceutical companies to team up with diagnostic firms in order to create larger markets for drugs. The two wild cards among the demand drivers—new and "returning" diseases that are difficult and costly to treat and the emergence of gene therapy—provide interesting opportunities to integrate or position new clinical diagnostic tests at the center of a patient knowledge—based therapeutic approach. Diabetes Management Diabetes, a glucose metabolism disorder that can cause a variety of severe complications involving virtually every major organ system, is one of the most costly and debilitating diseases. Worldwide, more than 130 million people were afflicted with diabetes in 1995; this number is predicted to reach 154 million by the year 2000, then double by 2025. The quest for improved care for the affected population is fuelling a diabetes management products market that was valued at about EUR10 billion worldwide in 1998 and is growing at 12—15% per annum. Several factors are responsible for this high growth rate, among them the aging populations in industrialized nations and escalating Western dietary and cultural influences in developing countries, which are contributing to an increase in the number of persons afflicted with this chronic disease. In addition, the belief and partial evidence that maintaining optimal blood glucose levels can postpone—or even eliminate—many diabetic side effects is increasing the intensity of diabetes care, and with it the utilization of specialty medical products and drugs. Diabetes is the leading cause of heart disease, kidney failure, nerve damage, stroke, blindness, skin ulcers, impotence, and amputations. Once these complications develop, they are difficult, if not impossible, to reverse. In the United States, the treatment of diabetes-related complications accounts for about 55% of the nearly EUR100 billion associated with diabetes management, the remainder being direct treatment expenses. The tremendous cost implications of diabetic side effects are demonstrated by the fact that although (confirmed) diabetics make up only about 11% of the population over the age of 65, elderly diabetics consume 40% of skilled nursing days, 29% of home-health visits, 26% of emergency room visits, and 21% of office consultations. Diabetics of all ages have a 1.5 times greater risk of being hospitalized, and they remain in the hospital an average of 2.8 days longer than nondiabetics with the same conditions. Coronary Stents Another large medical device market is the market for coronary stents, a technology that has revolutionized interventional medicine. The worldwide market for these devices is forecast at EUR2.1 billion in 1999, up from EUR1.9 billion in 1998. The


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United States will comprise approximately EUR1.5 billion of the total 1999 market. This young market is forecast to reach EUR4.8 billion by 2002, driven by increasing competition in both the United States and Europe. Forces that continue to provide momentum in the coronary stent market include the development of smaller stents (permitting a larger group of patients to be treated) and new adjunctive therapies, such as radiation and statin drugs, that are showing promising results in reducing the plaguing problem of restenosis. Orthopedics Orthopedic surgery is another large device opportunity. Ripe with new developments in bone, cartilage, and soft-tissue regeneration that may offset single-digit growth rates in the market for total joint implants, the musculoskeletal (MSK) surgery marketplace could exceed EUR8.7 billion in global sales this year. Just over half of all revenues (approximately EUR4.7 billion) will be generated in the United States. The overall market is projected to increase at a 4.5% compound annual growth rate from 1998 to 2002, with niche segments such as spine surgery, arthroscopy/sports medicine, and fracture fixation the most promising areas for future expansion, mainly as a result of new developments in biomaterials. Recently, companies have turned their attention to one of the most exciting areas in the MSK industry: biologically attuned implants that can mimic the body's own natural repair processes, potentially expedite the healing process, and overcome many of the problems associated with metallic devices. Most major orthopedic manufacturers are tapping into the high-growth arthroscopy/sports medicine, trauma, and spine segments, either through acquisition or the formation of strategic partnerships with biomaterial developers. Because biomaterials may be used to repair or regenerate most MSK tissues, including bone, cartilage, meniscus, ligaments, tendons, and even spinal disks, their applications cross the boundaries of traditional orthopedic segments. The potential market for orthopedic biomaterials approaches EUR2 billion in the United States alone. Transplantation Organ and tissue transplantation is a promising market for the future. The remarkable success achieved with organ transplantation over the past two decades has created a burgeoning demand for transplant procedures. This demand has, in turn, provided the impetus for the development of a range of new transplant-related drugs, devices, and specialty services. Drug and technology advances are already credited with transforming solid organ transplantation from a very risky to an almost routine procedure, with one-year survival rates that now average 70% or more for most organs. Meanwhile, intensifying competition for the limited number of donor organs is creating some ethical and clinical challenges. Efforts to resolve these issues will shape the course of this industry well into the next century. In the coming months and years, new organ allocation and donation rules will come into play, advanced life-saving technologies (some potential alternatives to transplantation) will be introduced and


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adopted, and disease management strategies will increasingly be applied to help control costs. For the more than 270 U.S. hospitals that collectively participate in nearly 900 programs, organ transplantation is a lucrative business. Despite the seemingly high costs of a kidney transplant (EUR48,000 in charges during the first year and EUR12,000 annually thereafter), a successful procedure pays for itself within five years through savings on dialysis treatments and complications of the disease. Kidney transplantation is deemed by urologists to be the most cost-effective treatment for end-stage kidney disease. Medicare, the single most important payer, currently pays for more than 90% of all kidney transplants performed each year. The majority of private insurers cover heart, kidney, liver, skin, and cornea transplantation. Diagnostic and monitoring products also have an important role to play in transplant patient management. For example, the potential U.S. market for transplant cytomegalovirus (CMV) monitoring tests alone is estimated at EUR20 million—EUR25 million. Antirejection drugs represent an annual U.S. market of more than EUR1 billion. Information Technologies Healthcare information systems (HIS) represent another lucrative medical technology market for the future. The U.S. market for these products—including patient care, clinical data, financial, laboratory, radiology, pharmacy, and other segments—is valued at more than EUR4 billion. Issues such as year-2000 conversion, increasing demand for point-of-care (POC) information, and the proliferation of Internet use represent new challenges as well as opportunities for the medical products industry. Internet-based electronic commerce (e-commerce) will have far-reaching implications for medical device manufacturers and providers alike, forever changing the way they communicate and interact. The HIS market is part of the total consumer and business-to-business e-commerce market, which totalled approximately EUR22 billion in 1998 and will grow to around EUR350 billion by 2002. This explosive growth represents a global "cyber mall" that gains new stores and shoppers daily. The increased reliance on information technology (IT) from a clinical perspective is being driven, first and foremost, by the need to provide remote access to diagnostic information and patient records. This can be explained by the ongoing reorganization of the U.S. healthcare system from stand-alone acute-care sites to multifaceted integrated networks that operate across the entire spectrum of inpatient and ambulatory care. Many of these networks represent virtually integrated systems—in essence independent entities that have common quality and cost goals and are tied together via information systems. Extending diagnostic services to caregivers in remote locations (that are part of an integrated health delivery network) and providing caregivers with remote access to patient records are highly valued by clinicians and other caregivers. Remote access is also the major driver that increases providers' reliance on IT. Stroke Management


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Stroke diagnosis and treatment is a field in dire need of cost-effective technology, as the incidence of this disorder and treatment costs continue to grow. Stroke is the third leading cause of death in the United States (after heart disease and cancer) and is the leading cause of long-term disability and nursing home admissions. The direct clinical and indirect economic costs of stroke are estimated at about EUR43 billion. This is considerably greater than the EUR23 billion—EUR30 billion cost estimates released just two years ago. Worldwide, total stroke management costs are estimated at more than EUR100 billion. The staggering cost of stroke rehabilitative care—up to 40% of victims are left with moderate to severe disabilities—is necessarily focusing much of the current clinical research and technology development on ways to prevent the disease. However, there is also a keen interest in optimizing the acute treatment of stroke to improve patient outcomes and reduce morbidity and long-term disabilities. Devices that fall into the stroke prevention and acute-treatment categories—such as implantable atrial pacemakers and defibrillators, carotid stents, least-invasive clot removal/dissolution devices (for ischemic stroke), and novel embolization products (for hemorrhagic stroke)—are likely to have the greatest long-term potential. The U.S. market for stroke prevention and acute-treatment devices could potentially reach at least EUR2 billion. Up to one-third of this potential could be realized within the next five years (depending on technology approval), resulting in a global market of approximately EUR1 billion by 2005. This market growth assumes the use of improved and lower-cost diagnostics (e.g., imaging, clinical tests) to identify and confirm persons at risk of stroke. Arrhythmia Management The global arrhythmia management device market is also growing rapidly, as the world's population ages and the cost-effective diagnosis and management of heart rhythm disorders grows in importance. The total market for these devices (valued at about EUR4.5 billion in 1998) includes external manual and automated defibrillators (EUR450 million in worldwide sales), traditional bradycardia pacemakers (about a EUR2.5 billion global market in 1998, growing at about 5% per annum), and implantable cardioverter defibrillators to treat tachycardias and various forms of fibrillation (EUR1.3 billion, with 25% annual growth). Electrophysiology and catheter ablation products represented about a EUR250 million market in 1998, growing at 12–15% per year. Wound-Care Products The U.S. wound-care market is a EUR3.7 billion industry dominated by surgical sutures and staples and conventional bandages and dressings. While these conventional products will continue to generate the majority of sales for the foreseeable future, their growth rate is rather low (see Figure 1). Recent advances in biotechnology, biomaterials, and tissue engineering are driving the development of a new generation of advanced products that, although hardly on the map today, may dominate wound management early in the next century. The wound-care community has been frustrated for years by a lack of effective treatment


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options for chronic wounds and by the high cost of care for these patients, who often require a year or more of expensive, weekly outpatient visits before their condition improves. New product manufacturers hope to capitalize on these concerns by offering products designed to improve healing rates, and in some cases even to prevent wound formation in high-risk patients. New products include bioengineered artificial skin, biosynthetic dressings, wound healing devices, and genetically engineered topical drugs. The stage is already set for the rapid adoption of wound-care products with proven outcomes that can easily fit into the growing number of cost-based disease management programs being initiated by providers for their patients with chronic wounds. This trend toward cost-effective, highly managed care places a strong emphasis on prevention and early intervention, an emphasis that is expected to continue to sweep the wound-care community in the years ahead. Sales of advanced-technology wound-healing products, including drugs, totalled less than EUR50 million last year, but this is expected to change dramatically in the years ahead, provided clinical outcomes are positive and products can demonstrate cost-savings potential. Artificial skin sales will be central to realizing this opportunity.


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2. Development and characteristics of the biopharma sector in Latvia

2.1. General Development of extensive pharmaceutical manufacturing and allied industries in Latvia also dates back to the Soviet times, because in 1939 there were only 13 laboratories with 154 persons employed. In the Soviet time science and industry were developing at a more accelerated pace, and every 4th medical preparation manufactured in the former USSR and intended for the USSR market was actually made in Latvia. According to approximate evaluation in the 1998 world prices, the Latvian pharmaceutical industry alone manufactured products for approximately EUR 1 million. Despite the fact that prices for medications were kept at an artificially low level, even then the profitability of the Latvian pharmaceutical industry managed to exceed 40%. At that time the Olainfarm company produced most of the preparations manufactured in Latvia at that time. Besides, the experimental plant of the Organic Synthesis Institute (now Grindex) played an important role. The industrial output of Biopharma at present is at EUR 70 million value (year 2002 data), which is 0.81 % per cent of GDP. In Latvia the most significant output of the Biopharma sector is ensured by the production of pharmaceuticals & medicines (EUR 38.2 million), production of lab & medical equipment, production of biotech oriented technologies and biopharma related services (EUR 8.6 million), production of perfumes & cosmetics (EUR 14.3 million). In less extent in output contribute production of basic organic chemicals (EUR 4.7 million). Production of detergents (EUR 17.0 million) also can be considered as a part of biopharma output however usually technologies applied here are irrelevant to biotechnologies or organic synthesis.

Figure 1 Distribution of manufacturing output among sectors in 2002

Textiles12%

Metals10%

Machinery3%

Paper & printing7%

Electric & optical apparatus

3%

Building materials3%

Chemicals, pharmaceutics &

detergents3%

Rubber & plastics2%

Vehicles3%

Other6%

Wood20%

Food & beverages28%

Source: Central Statistics Bureau, 2003


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Figure 2 Structure of Chemicals, pharmaceutics & detergent production sector in 2002

Source: Central Statistics Bureau, 2003 This sub-sector is represented by 28 companies, the biggest of which are “Olainfarm” (678 persons employed), “Grindex” (564 persons employed), “Medpro Inc.” (144 persons employed), ”Kalceks” (106 persons employed), “Baltijas Terapeitiskais serviss” (84 persons employed), “Rīgas farmaceitiskā fabrika” (74 persons employed).

The total amount of foreign investments in enterprises of this sector was EUR 40 million of which “Grindex” is the main one. Sector has relatively low export content accounting for 16 % and main export markets are Baltic States and CIS. Export of pharmaceuticals to the Western markets are limited due to low recognition of Latvian brands and registering of Latvian patents for the Western market that is costly and long term procedure.

Table 3 Key data of biopharma related industries 2002

Industrial

output, EUR

million

Value added, EUR

million *

Export content,

%

Employees

Manufacture of chemicals and chemical products, of which:

16.0 8.6 10.3 646

- manufacture of organic basic chemicals

4.7 2.8 n/a

Manufacture of pharmaceuticals, medicinal chemicals and botanical products

38.2 11.0 23.7 1800

Manufacture of soap and detergents, cleaning and polishing preparations, perfumes and toilet preparations, which:

17.0 3.5 8.8 735

Organic chemicals

7%

Cosmetics & perfumery

12%

Other chemicals

4%

Inorganic chemicals

42% Pharmaceuticals

32%

Detergents3%


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- manufacture of soap and detergents, cleaning and polishing preparations

2.7 1.5 0.1 n/a

- manufacture of perfumes and toilet preparations

14.3 2.0 8.7 n/a

Manufacture of other chemical products

4.1 0.5 1.9 193

Manufacture of medical and surgical equipment and orthopaedic appliances

8.6 4.1 15.1 598

* year 2001 data Source: Central Statistics Bureau, 2003

2.2. Output

Figure 3 Output and value added share in biopharma related industries, 2001 Million, LVL.

1.0

1.2

2.9

3.0

8.3

12.2

17.4

4.1

2.8

2.0

8.6

11.0

1.5

0.5

0.0 5.0 10.0 15.0 20.0 25.0 30.0

Detergents (2451)

Medical equipment (331)

Organic chemicals (2414)

Other chemicals (246)

Perfumes (2452)

Chemicals (241)

Pharmaceuticals (244)

Output Value added Source: Central Statistics Bureau, 2003 The tractive force of the sector is pharmaceutical industry; the leading roles in this sector are played by the JSC “Grindeks” and “Olainfarm”, as well as several smaller companies. The market of Latvian drug manufacturers constitute around 5 - 6 % of the total drug market of Latvia. Like all branches, also the pharmaceutical branch was influenced by the regional crisis in CIS in 1998. At present the Latvian drug manufacturers in the context of the total production volume have not yet reached the pre-crisis level (EUR 57.1 million in 1997), by manufacturing production in value of EUR 34.1 million in 2002. The level of the Latvian market of the local manufacturers as it used to be before the Russian crisis, which was 15.8 & in 1997, is not reached yet.

Figure 4 Industrial output of pharmaceuticals (NACE 244) production sub-sector, 1991-2002 (EUR)


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2033.3

17037.3

24745.8

57058.3

21786.4

29156.234181.2

0.0

10000.0

20000.0

30000.0

40000.0

50000.0

60000.0

1991 1993 1995 1997 1999 2001 2002

Source: Central Statistics Bureau, 2003 In development of other sub-branches the branch of cosmetics and perfumery (EUR 15.2 million in 2002) has not yet reached the production volume as used to be in 1992, resp. EUR 26.6 million. The sub-branch of medical equipment manufacture and production of other chemicals show a rather uneven development, yet the results of late years exceed the production amount of the beginning and the second part of the 90s, that is indicative of the successful reorientation and survival of these branches.

Figure 5 Industrial output of medical devices (NACE 331) production sub-sector, 1991-2002 (EUR)

82.1

1790.9

5004.4

2953.0

5785.0 5476.8

7706.7

0.0

1000.0

2000.0

3000.0

4000.0

5000.0

6000.0

7000.0

8000.0

9000.0

1991 1993 1995 1997 1999 2001 2002


Figure 6 Industrial output of detergent & cosmetics (NACE 245) production sub-sector, 1991-2002 (EUR)


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6491.4

26639.5

13737.011716.4

10086.7

13156.215217.6

0.0

5000.0

10000.0

15000.0

20000.0

25000.0

30000.0

1991 1993 1995 1997 1999 2001 2002


Figure 7 Industrial output of other chemicals (including gelatine & essential oils, NACE 246) production sub-sector, 1991-2002 (EUR)

1053.8743.6

1102.4

2446.7

1593.9

3548.5 3657.4

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

3500.0

4000.0

1991 1993 1995 1997 1999 2001 2002


2.3. Export The average export content in biopharma sectors in 2002 was 16%, which is twice as low in comparison with the average export content of the total industry in general, comprising 42%. This shows that at present these sectors export relatively small amounts. Such difference from the other sectors can be explained by the fact that the loss of the Oriental markets in early 90s of last century was not compensated by acquisition of new markets and that these sectors have not been able to discover new remarkable export markets at a later stage. The sectors having the highest export content are: pharmaceutical production - 23.7%, medical equipment production - 15.1%, and chemical substances production - 10.3%. See Figure 8 Export content in biopharma related sub-sectors in 2002. Comparatively high export content exists also in perfumery sector where the company “Dzintars” plays the most remarkable role.


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Figure 8 Export content in biopharma related sub-sectors in 2002


In this research the export content in certain niches of the sector was calculated by way of analysing the companies. (Figure 9 The highest & the lowest export content in selected Biopharma sub-sectors in 2002). This analysis provided the impression that acquisition of new niches is rather successful from the export point of view because alongside with the traditional niches, in which the export content is low, there are also new companies operating, which are having high export potential. In the future attention should be paid to development of and support to such producers operating in the niche.

The most successful products of the niche are in the field of equipment production (laboratory equipment, bioreactors and telemedical equipment), as well as services, biotechnology services and drugs testing. In the field of substances production the most successful are the niches of active pharmaceutical substances production and injectibles production. At present there is a small export proportion in the niche of herbal, veterinary and microbiological agriculture preparations production, yet, taking into account the global demand, these subsectors could have remarkable and rapid increase of exports.

Figure 9 The highest & the lowest export content in selected Biopharma sub-sectors in 2002

15.1

1.9

8.7

0.1

23.7

10.3

0 5 10 15 20 25

Medical equipment (331)

Other chemicals (2466)

Perfumes (2452)

Detergents (2451)

Pharmaceuticals (244)

Chemicals (241)


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Source: Company data, VL BALTIC calculations, 2003

The Figure below (Figure 10 Export dynamics in biopharma related industries and comparison with total export trend) shows the dynamics of exports of the sectors related to biopharma sector from 1996. It can be seen that, in comparison with the beginning of the period, the both sectors – production of the chemical-medical equipment and production of the optical-medical equipment - have increased. The average annual rise tempo for exports of chemicals sector has reached 6.8%, and for exports of optical and medical equipment production sector it has been 9.2% respectively.

At the same time, the total amount of state exports has reached 9.8% of the annual average rise. The total exports volume has increased more rapidly than the exports volume of those certain sectors, yet it has to be kept in mind that this increase has been ensured largely thanks to the traditional woodworking sector. If compared to the exports increase in other production sectors, it is to be concluded that the sectors related to biopharma sector are successful from the exports increase point of view, by ranking themselves between other most rapid exponents of exports, for example, the machinery sectors and metal processing sector.

This confirms the competitiveness of these sectors in the international market and their significance in facilitating general increase of exports in the state.

Yet, the development of exports increase has not been smooth and, without any doubt, it has been affected by the overall changes in the conjuncture of the external market. If compared to the dynamics of the total exports volume, it is clearly seen that the dynamics of the chemical sector matches the dynamics of the total exports. On the other hand, the exports volume dynamics of the optical and medical equipment sector has been different than the total dynamics of exports in spite of the fact that this sector also has a very similar structure of the external market. This could be indicative of the fact that this sector is more specialised and is more dependant not on the total demand but on the competitive situation in these markets of the niche.

0%

0%

10%

19%

20%

30%

50%

64%

79% 90% 90%

95% 96%

0% 20% 40% 60% 80% 100% 120%

Microbiological agriculture & horticulture products

Veterinary pharmaceuticals

Herbal preparations and finished forms

Biomedical equipment

DNA manipulation services

Drug approval & clinical trials

Laboratory Information Systems

Injectibles

Active pharmaceutical ingredients

Telemedicine equipment

Biotechnology services

Bioreactors

Laboratory equipment


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Undoubtedly, the development of these sectors will depend on the market situation in the sensitive eastern markets and the ability to diverse these risky markets. As can be seen in the tables below, market diversification continues in these sectors, which means that in long-term period the development of these sectors could be predicted as being smoother in their increase.

Figure 10 Export dynamics in biopharma related industries and comparison with total export trend

57.264.3 62.4 60.9

72.079.5

5.6 6.9 6.0 9.4 12.0 8.7

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

1996 1997 1998 1999 2000 20010.0

200.0

400.0

600.0

800.0

1000.0

1200.0

1400.0

Chemicals Optical and medical equipment Total export volume

Source: Central Statistics Bureau, 2003 When analysing the structure of the exports markets of the sectors related to the biopharma sector, (Figure 11 Change in foreign markets of biopharma related industries) it can be seen that there is a high increase in the percentage of exports of the CIS and the Baltic States, Lithuania and Estonia. The development of the sectors related to the biopharma sector since 1990 has been very similar to that of other production sectors’, and the initially huge percentage of the CIS markets has decreased because of the market enlargements in the West and the Baltic. Yet, it has to be pointed out that in these sectors the process of substituting the markets of the CIS is taking place comparatively slower and, for the time being, the percentage of exports volume of the markets of the CIS in both of the sectors related to the biopharma sector constitutes 24-29%, while in the total exports structure the CIS’ markets take up 10%. But the largest percentage of exports of these states is made up by Lithuania and Estonia, comprising around 44% for the chemical sector and 27% for the optical and medical equipment sector respectively. The comparatively small percentage of exports from the Western countries can be explained by the complicated acquisition of these markets. For the purpose of export to these countries Latvian producers have the need for recognizability and registration of goods, which possibly is not that important for other production sectors. It is foreseen that in the future the percentage of the western markets will increase slightly,


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yet at present there is no reason to believe that the market structures of these sectors will align in comparison with other Latvian production sectors. These sectors will still be very dependent on purchasing power in the CIS’ markets and on the competitive position in the Baltic markets.

Figure 11 Change in foreign markets of biopharma related industries

Chemicals Optical and medical equipment

Total export

Source: Central Statistics Bureau, 2003 More detailed analysis of the export markets is provided in the figures below (Figure 12 Export of medical equipment by country in 2002 - Figure 15 Export structure of organic chemicals in 2002).

Figure 12 Export of medical equipment by country in 2002

(HS 9018-9021)

Ukraine22%

Belarus4%

Lithuania17%

Germany16%

Estonia12%

Denmark7%

Other11%

Sweden5%

Russia6%

Source: Central Statistics Bureau, VL BALTIC calculation, 2003

Figure 13 Export of organic chemicals by country in 2002

0%10%20%30%40%50%60%70%80%90%

100%

1999 2002

Other

CIS BalticsEU

0%10%20%30%40%50%60%70%80%90%

100%

1999 20020%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1999 2002


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Lithuania22%

Estonia4%

Slovenia3%

Japan14%Switzerland

11%

United States9%

Russian Federation

6%

Belarus6%

Ukraine5%

France4%

Other11%

Germany3%

UK2%


Figure 14 Export of pharmaceuticals by country in 2002

Lithuania35%

Belarus7%

Estonia21%

Russian Federation

16%

Kazahstan2%Other

8%Ukraine

10%

Poland1%


Figure 15 Export structure of organic chemicals in 2002

Heterocyclic compounds with nitrogen hetero-

atoms only14%

Hormones, prostaglandins,

thomboxanes and leukotrienes

13%

Diazo-, azo-or azoxy-compounds

13%

Provitamins and vitamins

6%

Phenols phenol-alcohols

5%

Other14%

Oxygen-function amino-compounds

2%

Derivatives of phenols or phenol-

alcohols2%

Nucleic acids and their salts

15%

Organic derivatives of hydrazine or of

hydroxylamine16%



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2.4. Employment Overall the Biopharma production and service sector employs around 3730 specialists, about 1110 of which are the senior experts and researchers. About 50 per cent of the employees work in the production of pharmaceuticals & medicines sector. But the total number of experts working in the Biopharma R&D sector at present is around 1830, 40 per cent of which are senior researchers. Like other sectors the Biopharma sector experienced significant staff reduction, that was due to the changes of the structure of economics in the beginning of the 1990s. The R&D sector experienced the most significant staff reduction; the number of the staff was reduced three times. To a lesser extent the staff reduction affected the production sector where the number of the employees has been cut around one and half times since 1990.

Table 4 Productivity level in biopharma related industries, 2001

Annual industrial output per

employee, thsd. EUR

Annual value added per

employee, thsd. EUR

Manufacture of chemicals and chemical products, of which:

24.8 13.3

Manufacture of pharmaceuticals, medicinal chemicals and botanical products

21.2 6.1

Manufacture of soap and detergents, cleaning and polishing preparations, perfumes and toilet preparations, which:

23.1 4.8

Manufacture of other chemical products 21.2 2.6Manufacture of medical and surgical equipment and orthopaedic appliances

14.4 6.9

Average 21.1 7.0Source: Central Statistics Bureau, 2003 When analysing the official data provided by the Central Statistical Bureau on the sectors related to the biopharma sector the following situation emerges: the average staff productivity balances between 21 000 EUR in the year of construction per employee, whereas the added value comprises around EUR 7 000 EUR per employee a year. The highest productivity (value added) can be seen in the chemical substances production subsector – EUR 13 300, although, having the present data, it is hard to distinguish the productivity between the production of organic substances and the production of inorganic substances. High level of productivity can be seen also in the pharmacy subsector – EUR 6 100 of value added per employee, and the medical instruments and equipment production subsector - EUR 6 900 respectively. There is lower productivity in detergents and perfumery subsector – EUR 4 800, and the lowest level of productivity is in the production subsector of other chemical substances – only EUR 2 600. See Table 4 Productivity level in biopharma related industries, 2001.


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Taking into account the fact that such official data is not available on smaller subbranches, this research contains the analysis of the largest companies operating in the biopharma sector. This kind of analysis indicated to a slightly higher level of productivity – on average EUR 25 000 of industrial output per employee in 2002. This analysis showed that much higher levels of productivity are in the biotechnological equipment production subbranch, biotehnology services subbranch and biopharma services subbranch, as well as in veterinary medicine production. See Figure 16 Labour productivity (Turnover/Employees)in selected Biopharma sub-sectors in 2002, thsd. EUR.

Figure 16 Labour productivity (Turnover/Employees)in selected Biopharma sub-sectors in 2002, thsd. EUR

5.3

6.0

15.8

22.7

24.7

30.4

31.3

44.9

46.3

50.3

84.8

93.4

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0

Microbiological agriculture & horticulture products

Laboratory Information Systems

Laboratory equipment

Herbal preparations and finished forms

Injectibles

Active pharmaceutical ingredients & finished forms

Biotechnology services

Biomedical equipment

Drug approval & clinical trials

Veterinary pharmaceuticals

Bioreactors

Medical supplies

Source: Company data, VL BALTIC calculations, 2003 Summing up the results of this analysis it is to be concluded that the highest staff productivity is in two subsectors – medicinal products production and production of medical and biotechnology equipment. In medicinal products production the most perspective product groups, where the level of staff productivity is the highest, are veterinary medicine and active pharmaceutical ingredients & finished forms. Subsequently, these subsectors are having the highest level of contribution to the R&D from the staff. In the future there might be increase in contribution to developing the R&D in such sectors as microbiological agriculture & horticulture products, as well herbal preparations and finished forms, since there is demand for these sectors in the global market, and there are conditions in Latvia for developing the R&D base and for shifting this base to the commercial sector. Yet, it has to be borne in mind that at present the staffing costs are relatively law and they will certainly grow because of free movement of the workforce within the EU region. Because of that the general level of productivity during next five years could


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maintain the present amounts or even could get lower in certain sectors. Only specific production niches could reach higher levels of productivity.


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2.5. Foreign investment attraction The flow of foreign investments into Latvia Biopharma sector is slow. The total amount of investments is little and the total of FDI could be around EUR 25 million, 60% of which have been invested in production, 16% in health care sector and the rest of FDI refer to wholesale & retail of medical supplies. The number of strategic investors in production sector is very little. Practically the total amount of investments can be evaluated as financial investments. The little flow of FDI in Latvia Biopharma sector can be due to the little number of production enterprises. Obviously creation of new production units has been restricted by the narrow local market and low activity in creating new products, which can be explained by the lack of assets for high risk projects. Nevertheless, coming of new investments is expected, especially in the fields of R&D. Access to new financial funds and emergence of risk and seed capital funds could facilitate the creation of new products and projects. The working out of new projects could facilitate coming of FDI particularly in the SME enterprise sector.

Table 5 FDI track record in Latvian Biopharma sector, 2003

Investor Origin Target Amount, million EUR

Activity

Arial (Magnum Group & Investeerimispank)

Estonia PJSC Grindex 8.4 Pharmaceutical production

Inex Infotrade Inc.

USA PJSC Grindex 3.0 Pharmaceutical production

Hansa Investment

Germany PJSC Olainfarm

1.0 Pharmaceutical production

Vivaldi Denmark JSC Dzintars n/a Production of cosmetics IKI Switzerland JSC Dzintars n/a Production of cosmetics Tamro Medlab

Finland LLC Hansa Pharma Balticum

2.2 Wholesale & retail of pharmaceuticals and equipment

Oriola Finland LLC Oriola Riga


Magnum Medical

Estonia several Latvian pharmacies



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Bulgaria LLC Adelina n/a Wholesale & retail of pharmaceuticals and equipment

Germany LLC Berlin-Chemie/ Menarini Baltic SIA

n/a Wholesale & retail of pharmaceuticals and equipment

USA LLC ISP Optics Latvia


Eli Lilly USA n/a Wholesale & retail of pharmaceuticals and equipment

Merck, Sharp & Dohme IDEA

USA LLC MSD Latvia


LLC Adrona n/a Wholesale & retail of pharmaceuticals and equipment


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3. Local and regional demand pattern

3.1. Global outlook

3.1.1. Pharmaceuticals Demand for pharmaceutical products is highest in the United States, Western Europe, and Japan. The United States accounted for approximately 33 percent of the total world market for ethical (prescription) pharmaceuticals in 1996, while Europe’s share amounted to about 29 percent; Japan’s share was nearly 18 percent.

3.1.2. Medical devices In 2000, the global market for medical technologies was EUR169 billion. The most important markets for medical devices are the United States, the European Union (EU) and Japan. In 2000, the United States market totalled EUR 71.8 billion, (42% of the global market). The Japanese market was EUR 24.8 billion, while the market for Germany, France, Italy, the UK and Spain combined totalled EUR 35.2 billion. While the provision of health care is increasingly subject to cost containment pressure in these markets, they are of prime importance because of their size and scope, their demographic characteristics and their receptiveness to technology. European Union (EU) The implementation of a harmonized regulatory system for devices within the EU allows for more efficient product approvals in Europe for firms that are adequately prepared. The EU is to be significantly expanded in early 2004, with as many as 10 new member states. The new members are expected to be Estonia, Latvia, Lithuania, Hungary, Slovenia, Poland, the Czech Republic, Slovakia, Cyprus and Malta. The expansion will create a single market for medical devices and diagnostics spanning 28 countries, assuming that companies are able to meet labelling language requirements. Companies must comply with CE marking requirements for the sale of medical devices in the EU. In addition, manufacturers of some medical devices will be impacted by revisions to the EU General Product Safety Directive 92/59/EEC governing the safety of consumer products. The amendment, which comes into effect in 2003, may also have some impact in relation to devices supplied to hospitals. New, as well as used and reconditioned medical devices and diagnostic products may be covered by the Directive when used as part of a service and when they are likely to be used by a consumer, even if they were not intended for use by them. The amendment imposes significant new obligations on manufacturers and distributors. It is anticipated that the European Commission will provide clarification as to the extent to which the amended Directive applies in situations in which there are existing product specific directives.


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The United States Although the U.S. medical device market is the largest in the world, its share of the total world market has declined from 60 percent in 1975 to 42 percent in 2000. The U.S. health care environment is characterized by strong competition, a complex regulatory environment under reform, rapid consolidation of purchasers, and the importance of supplier visibility and aftersales service. Although both private and public health care sectors place a premium on the ability to control costs, the market growth is supported by the continued aging of the population and strong demand for advanced medical technologies. It is important to note that the U.S. market is not homogeneous, but rather consists of a number of regional markets. Attention to regulatory and reimbursement requirements, as well as the provision of appropriate evidence of clinical effectiveness, is key to sustained success in the U.S. market. As of April 26, 2002, foreign establishments importing, or offering for import, medical devices into the United States are required to meet U.S. Food and Drug Administration (FDA) requirements for registration and listing, including designation of a U.S. agent who resides or maintains a place of business in the United States. Japan The Japanese medical device market is the second largest single country market in the world. The market will continue to grow as Japan’s population continues to age more rapidly than that of any other developed county. It is estimated that by the year 2010, people over the age of 65 will account for 21 percent of the total Japanese population, representing the highest percentage of senior citizens of any country in the world. This demographic trend is also generating cost containment pressures in the Japanese health care market including greater emphasis on home care. Home health care products currently account for approximately half of Japan’s health industries market. Cost containment pressures are also causing Japanese buyers to pay increasing attention to the economies and lifesaving benefits of certain technologies. The "silver market" (products for the elderly) and the assistive devices/rehabilitation equipment market are being under served by domestic Japanese production. Good opportunities exist in exporting dental instruments, surgical and orthopaedic supplies, as well as radiology and imaging technology to Japan. Market opportunities also exist in cardiovascular and implantable devices. Both the Japanese regulatory approval and reimbursement systems are currently undergoing reform. Proposed revisions to the device regulatory system will bring it more in line with systems in Europe and the United States, and may result in faster approvals. Under the proposed legislation, categories of low-risk products would be subject to certification only, while higher-risk products would require approval. Final adoption of the law is expected in June 2002, with implementation to occur over a 3 year period until June 2005. Reimbursement reform, which may take effect as early as April 2002, is aimed at reducing health care costs and is anticipated to involve price cuts for a range of


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medical devices. The proposed new system of reference pricing will set prices for certain classes of medical devices at 1.5 times the average rate in a sample of countries. The new system may adversely impact some exporters to Japan as it may not fully take into account the high cost of doing business in that country. Asia Asian markets for medical devices grew substantially in the period 1994 - 1997, at an average annual rate of 17 percent. While these markets were poised for increased spending on health care and medical technology, the Asian financial crisis had an impact on market growth in this region, with the Korean market being the most affected. Examples of 2000 market size by country are as follows: China EUR 2.9 billion, Taiwan EUR 1.25 billion, and Korea EUR 1.2 billion. The largest market, China, is expected to see increased demand for cost-efficient, high-quality medical devices to meet the demand of the expanding elderly and middle-class segments of the population.

3.2. Baltic Sea Region outlook

3.2.1. Medicon Valley Includes the Greater Copenhagen area in Denmark and the Skane area in Southern Sweden. The biotech cluster is responsible for approximately 60 per cent of the Scandinavian pharmaceutical and medical industry. Key features of the region include: Medicon Valley employs around 35,000 full-time workers. The region is a leading centre in medico-technology and biotechnology thanks to its extensive community of high-tech companies, modern laboratory facilities and world-class research. Medicon Valley is one of the three largest medical and biotechnological growth centres in Europe and home to more than 60% of Scandinavia's pharmaceutical industry. Medicon Valley’s research is world-class particularly within four large areas: diabetes inflammation neurology and cancer

The backbone of this infra-structure is the academic and research environment that is found in the region. The Medicon Valley alone is home to 26 university hospitals and 11universities with a total of 135,000 students

More than1,200 companies in the region employs about 30,000 people in the medical and biotech industries, including 4,000 researchers with advanced academic degrees


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3.2.2. Sweden According to Ernest and Young, Sweden has the fourth largest biotechnology industry in Europe after Great Britain, Germany and France. After a rapid growth in recent years, the Swedish biotech industry today comprises of more than 200 companies, the largest when measured in relation to both population and GDP. Sweden’s success so far is the result of a historically strong biotech research organisation and big pharmaceutical consolidation, which in turn was complemented in the 90s by a boom in entrepreneurship and access to venture capital. Sweden’s position builds on a long tradition of R&D achievements. Over the years, seven Swedes have received the Nobel Prize in Medicine and Physiology. The presence of two of the largest pharmaceutical companies, AstraZeneca and Pharmacia Corporation, with strong roots in Sweden, and large investments in research and public heath-care have also been important drivers in the development of biotechnology in Sweden. Swedish research achievements have often been the result of successful co-operation and fraternising among the fields of corporate and academic research, public-health care and other institutions. An OECD study, covering business and academic research collaboration across industry sectors, showed this to be more common in Sweden than anywhere else: 45 percent of firms with more than 50 employees in biotechnology participate actively in joint R&D and other innovation projects with other organisations As a result of persistent investment in research, the quality is among the highest in the world. Together with Switzerland, Sweden publishes the largest number of scientific articles in the world in relation to population. The Swedish publication portfolio is also quite heavily geared towards life sciences, particularly towards medical fields. Life science papers represent approximately 85 per cent of all papers in the higher education sector and more than two thirds of all publication in businesses, reflecting a strong concentration in both public and private R&D in life sciences. Stockholm – Uppsala BioRegion Common vision of Stockholm – Uppsala BioRegion is to draw together and further develop islands of competence and individual prominent clusters within the field of biotechnology. The region will attract world-class expert manpower within education, research and enterprise. Overall planned investment into this cluster is expected to be more than EUR 1 billion. BioRegion encompasses:

• 7 universities

• 60% of Swedish biotech R&D potential (more than half of the Swedish scientific articles within biotechnology)

• 3800 scientists and 6700 doctoral candidates

• 3 university hospitals

• 50% of Swedish biotech companies located (more than 150)


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• Region has substantial industrial and research strengths within complementary fields of technology, such as IT, industrial applications and materials technology

Stockholm is not regarded as a functional bioregion even though it has a lot of content. The creation of a clear and common view of the opportunities in the region has high priority. In order to reach the long term vision and goals an increased cooperation and flow of ideas and resources along the axis Uppsala-Solna-Stockholm-Huddinge-Sodertalje-Strangnas is reguired. It is also necessary to identify and remove obstacles to technology transfer, start-ups, new establishments and expansion of companies. This is the foundation of the proposed program which is built up by a number of target areas. Specific projects will be conducted in each area.The projects will be based on demand. Different projects will have different steering groups according to their character.

Table 6 Characteristics of Stockholm’s Bioregion potential The figures refer to medical, technological and natural sciences only.

Institution Scientists PhD-students Publications Karolinska Institutet 1140 2060 3600 Uppsala University 650 1360 3180 Royal Institute of Technology 450 1450 1050 Stockholm University 600 800 850 Swedish University of Agricultural Sci.

910 900 1650

Sodertorn University College 50 60 60 R&TD companies Employees

Novum Research Park 13 300 Teknikhojden 28 140 Uppsala Science Park 150 1200 Stockholm Bioscience* * Stockholm bioscience is currently in an advanced planning stage

3.2.3. Finland There are approximately 119 firms active in biotechnology in Finland at the moment. In the European context, Finnish biotechnology firms emerged somewhat later than corresponding firms in the UK, France or especially Sweden, however, earlier than those in Germany. The largest geographical concentration areas of biotechnology industry were located in the Helsinki and Turku regions. About 65 percent of the firms were located in the regions or in their immediate surroundings. The other regional centres were located in Kuopio, Oulu and Tampere, listed in the order of magnitude, respectively. 30% of fall the firms were founded in the years 1997-2001. Generally, the chemical industry as a whole is the most important customer branch of Finnish biotechnology firms. For example, many biotechnological innovations are applied in pharmaceuticals and chemicals, but they are utilised in diagnostics and other sectors, too. In particular the pharmaceuticals industry is the most important customer branch for all cohorts of firms. Health care and diagnostics and other services are important particularly for the oldest cohort and provide an important customer branch for almost half of the firms. Food and feed and other chemical industries are generally important


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customers of biotechnology firms. Agriculture and forestry, and environmental activities are customer branches for only a few biotechnology companies. The European Union was the most important export region of the Finnish biotechnology firms Finnish companies involved in biotechnology activities, founded before 1991, employ over 10,000 people. The companies founded in 1991-2001 employ over 1,000 people. The majority of Finnish biotechnology firms are quite young and still in the early stages of gainful economic activities. Their turnover, profits and exports are, for the younger firms in particular, still low, profits even negative, while their growth expectations are high. We could even claim that the greater the accounting losses, the higher is the anticipated growth of sales revenues in the future, if the losses are due to high R&D expenses. The high R&D intensity of especially younger firms indicates that their products are still largely in the development phase and that few of their products are yet in the market. Furthermore, the commercialisation process – from the discovery to a profitable production process – may easily take from 10-15 years. At the same time, only a few of the innovations turn out to be exploitable. This increases the risk assessed and the rate of returns required by the investors. The high risk can be reduced if a company has an innovation portfolio that is wide enough. This, in turn, implies high R&D intensity and decreases the current profits. During the 80s and 90s, there was a remarkable investment boom in Finland in the biotechnological sector, and this trend is still continuing. With more than 115 biotechnology companies, Finland can be ranked amongst the top European countries in terms of number of biotechnological firms. Biotechnology comprises a large sector. Approximately half the businesses operating in Finland concentrate on health products such as pharmaceuticals. In general terms, the use of biotechnology in the pharmaceutical industry is increasing. It is estimated that biotechnology has been used in every fifth new pharmaceutical brought onto the market

3.2.4. Denmark At the beginning of the 1990's, the Danish biotechnology industry was essentially unknown to the public and could, in fact, hardly be described as an industry. Rather, it was a handful of large companies, each of which had some biotechnology activities. By the turn of the century, more than 30 additional Danish companies had been established. The vast majority have survived, remained headquartered within the Medicon Valley region and are now developing new products. Denmark's specialist biotech sub-sectors include: applied microbiology immunology endocrinology diabetes/metabolism infectious diseases neuroscience oncology biochemistry molecular biology


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The biotech sector is not yet mature in Denmark, but is moving towards consolidation and the development of a critical mass. New research institutes are being planned and built and the number of biotech companies in Denmark is continually increasing. For example, during August 2001, it was announced that Denmark won the right to develop a prestigious research centre - Global Bio Information Facility (GBIF) at the Zoological Museum of Copenhagen. Denmark is active in the pipeline stages of biotechnological development, with one of the most advanced markets for biotechnology in the development phase (ie. pre-clinic) stage.

3.2.5. Poland In Poland, the modern biotech industry is at the beginning of the creation process. The first field trial with three transgenic plants: potato, beet and corn were conducted in 1997. The ‘classic’ biotechnological products, such as antibiotics or microbiological products, are well established. The old-fashioned industry is influenced highly by the decision-making bodies. In Poland, biotechnology is applied in agriculture, the food economy, industry, forestry, health and environmental protection, and other areas. In 1993-1994, biotechnology, including safe biotechnology management, was introduced into the programme of education of a number of universities and technical academies. In past years, the pharmaceutical producers were consolidated within the companies of Polfa and, for herbal medicines, Herbapol. The original intention of privatising Polfa as one concern was revised, and the companies are being treated as separate concerns. Some have been privatised, several with foreign strategic investors, and some await privatisation. There has been considerable investment in the sector, both for market realignment and to obtain licences for Good Manufacturing Practice (GMP) as required by the Polish government since 1997. Between 1995 and 1998, around 250 million was invested in basic pharmaceutical production (and 270 million in production of pharmaceutical preparations). Pharmaceutical production is largely destined for the rapidly growing Polish market. Domestic capacity is insufficient to meet demand, and the majority of Polish consumption is met by increasing levels of imports, mostly from the EU. Around 75 percent of Polish pharmaceutical exports go to CEE countries (1998), but the share of exports to the EU is increasing. The Polish industry is profitable, with gross margins ranging from 12 to 19 percent of revenue between 1995 and 1998.

3.2.6. Estonia Genomic studies in Estonia were launched, as early as the 1960s. In the 1980s was founded the Estonian Biocentre, and sufficient investments were made to upgrade the technological base to world standards. After the opening of the Laboratory of Molecular Genetics in 1984, the National Institute of Chemical Physics and


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Biophysics in Tallinn became one of the leading institutions in the field of biotechnology. According to one survey (2002), there are 15 research institutions, 138 companies, and about 1700 people involved in the fields of medicine, biology, and chemistry (26 companies and 300 people in biotechnology). Each year, 700 students will graduate in the abovementioned fields from universities, and an additional 700 from vocational schools. During the period of 1997 to 2002, about 300 PhD-s and MD-s were awarded in these fields. In 1999 Estonian Genome Foundation initiated, the biggest biomedical and health care project in Estonia. A five-month pilot project that began in October 2002 was successfully completed by February 2003. By the end of the pilot phase, more than a thousand voluntary gene donors had joined the project and verified the model of data collection. Now the project has been expanded, so as to include all of Estonia. Estonian pharmaceutical market is relatively small, it is fast growing. Spending in 2002 was around EUR 120 million, equal to EUR 88 per capita. In recent years, annual growth has been strong, at between 15-20%. Growth in 2003, however, is forecast to slow as a result of government cost-cutting reforms. The local industry has also suffered under the burden of the costly modernisation that is required to bring domestic standards in line with international norms and weak external demand. The market remains heavily reliant on imports, although domestic production activity is improving and hence, the dependence should gradually decline. Multinational presence is increasing and local manufacturing industry development continues to be positive. Domestic production covers only around 10% of demand.

3.2.7. Lithuania Back in 1997, in its review on European pharmaceutical industry, the consulting firm Ernst and Young International Ltd. was forecasting that the Lithuanian biotechnological companies would soon enter the Western markets with their high quality and inexpensive biotechnological products. Although only several years have passed the forecasts seem to have become true. Having attracted EUR 20 million investments from a private Dutch company Gatio Investment Co Ltd., in October 2000, the Biotechna company (formerly known as Biofa) built a state-of-the art pharmaceutical plant in Lithuania. Over the first half of 2000 the company's turnover reached EUR1.7 million. Today Biotechna has very ambitious plans of achieving 10% share in the world's market for Interferon. Biotechna employs around 100 people. Good example of The fact that the Lithuanian biotechnology specialists haven't gone abroad for better employment opportunities and stayed to work in Lithuania is a tremendous asset to the Lithuanian pharmaceutical industry. The availability of highly-skilled and well-trained specialists in the country created conditions for the commercial success of this industry sector.


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Modern Lithuanian pharmaceutical industry is unique in the Eastern and Central Europe. So far, Lithuanian companies have been the only ones in the region capable of developing and producing gene-engineered medicine. In the entire Baltic Sea region the only other manufacturers of such products are the Pharmacia (Sweden) and Novo Nordisk (Denmark) companies. Companies such as Biofa, Fermenta, Biocentras and BIOK became the leading biotechnological industry representatives in Lithuania.

3.2.8. Russia Depending on the sector, 60-85 percent of the market for biotechnology products in Russia is occupied by imports. While the growth of the pharmaceutical and dietary supplements market in Russia is slowing, the demand for biotech products in agriculture and food processing is growing fast. The environmental protection sector receives the lowest level of financing, and is mostly occupied by the domestically made biotech products. Russia accounts for about 0.5 percent of the world biotechnology market. Experts estimate of the Russian biotechnology market range from EUR1 billion (Abercade Consulting, Moscow) to EUR1.4 billion (Institute of Consumer Marketing, Moscow). The optimistic forecast of the Russian agriculture biotech market potential is EUR2.5-3 billion per annum. Foreign suppliers and manufacturers occupy 65-70 percent of this market. Russian companies sales amount to EUR300-360 million (about 30 percent). The growing sectors for application of biotechnology products are pharmaceuticals, dietary supplements and cosmetics, agriculture, food processing, and environmental technology. According to Abercade Consulting (Moscow), in 2001 biotechnological products within the Russia pharmaceutical market accounted for EUR 580 million. Russian companies had only 25-30 percent market share. The products include vaccines, insulin, antibiotics, etc. According to Vedomosti newspaper, in 2001 the Russian insulin market (mostly state financed) was supplied by products from Novo Nordisk - 58 percent (Denmark) and Eli Lilly - 29 percent (USA). Russian manufacturer Ferein accounts for 3-5 percent of insulin market, but it does not supply government orders. Estimates of the dietary supplements (nutritionals) market in Russia range from EUR1.4 billion to EUR1.9 billion. Russian products occupy 65-70 percent of the market, and foreign products have 30-35 percent by quantity, but the value of the foreign producers’ market share is inversely proportional – about 60 percent. There are more than 2,000 manufacturers of dietary supplements in Russia. Experts forecasts say that the growth of the market will slow down significantly in the near future, and competition will increase. The most popular DS in Russia are those with pharmacological effect. While in early years of DS manufacturing most products were generic in their application, currently producers are trying to produce DS for specific health problem (allergy, sight improvement, hepatic protector, etc). The type of products with growing popularity are: immune system boosters (increasing resistance to colds and flu, improving energy levels, etc), anti-stress, cancer protection, sedatives, digestion and bowel improvement, and sport supplements.


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The capacity of the Russian market for biotech agricultural products is about EUR500 million a year. The volume of consumption of biotechnological products for animal farming is several times higher than in plant growing sector, although horticulture demonstrates a slow but continuous increase. According to Abercade Consulting (Moscow), 95 percent of biotech preparations in animal farming is supplied by foreign manufacturers. A similar situation is observed in the plant growing sector—about 75 percent of the biotech products for this sector are imported. Large agricultural industrial complexes are the end-users of imports. The remaining 25 percent of the market is supplied by Russian companies and consumed by smaller agricultural firms. Russian producers seek efficiency through introduction of new technologies and new materials. The demand for biotech products in farming and horticulture will continue to grow. Annual demand of Russian food processing industry for biotechnology products is estimated at EUR100 million. The products include yeast, ferments for alcohol distilling, beer and wine manufacturing, bacterial products for milk processing, and GMO additives for meat processing. According to Abercade Consulting, annual sales of bacterial concentrates (including concentrates enriched with health enhancing bacteria) for milk processing industry in Moscow amount to EUR1.6 million. The growing investment in food processing industry on regional level leads to steady growth in demand for these products. Environmental protection is one of the worst financed sectors of economy in Russia. Although there is a big need for new efficient environment technologies in Russia, financial constraints limit opportunities for U.S. imports. Russian biotechnological products and processes currently occupy the biggest share in this segment due to their low price. The following sectors of biotech applications for the environment show growth potential: treatment of oil spills, ethanol and methane production from industrial and agricultural waste (including bio-reactors), bio-rehabilitation of soil and water, and biotechnology in rare metal extraction.


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4. Innovation in Latvian biopharma sector

4.1. Entrance of new specialists & education curricula In 2003, the total of the students in all the branches connected with Biopharma section was 5230. Branches of health and forest management are the most popular ones among the students, although there are few study programs that have a close tie with Biopharma section now. The amount of the subjects connected with biotechnologies could be rising in the future. The majority of the students the students having the subjects of Biopharma branch are prepared in Riga Technical University where there is also the largest number of the studies programs offered.

Figure 17 Biopharma sector relevant students within 10 years

3761

4448

5230

0

1000

2000

3000

4000

5000

6000

1993 1998 2003 Source: Central Statistics Bureau, Universities, VL BALTIC calculations, 2003

Basically four high schools in Latvia prepare academically educated new specialists of Biopharma sector. These are: University of Latvia, Latvia Medical Academy, Riga Technical University and Latvia University of Agriculture. All these high schools, except Latvia University of Agriculture, are located in Riga. Latvia University of Agriculture prepares specialists of this branch in Jelgava.


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Figure 18 Number of students by disciplines relevant to Biopharma in 2003

40516070107115

165270292

363460471

10531713

Wood technology

Prosthetics

Environment & Water management

Environment engineering

Medical engineering

Optometry

Chemical technology

Veterinar sciences

Chemistry

Pharmacy

Biology

Food technology

Forestry & ecology

Healthcare

Source: Central Statistics Bureau, Universities, VL BALTIC calculations, 2003

If we analyse the studies programs offered by the educational institutions mentioned above, the conclusion is that Riga Technical University is the one which corresponds best to Biopharma studies centre. There are many teaching programs in this high school that are closely connected to Biopharma sector, and they also include most of Biopharma subjects. University of Latvia offers wide spectre of subjects as well, yet the tie to Biopharma is sometimes loose.

Table 7 Relevance & variety analysis

Pharmacy Biomaterials & Organic Chemistry

Medical engineering

Environment & Biotech

Food biotech

Riga Technical University

R: strong V: good

R: strong V: good

R: strong V: good

R: limited V: narrow

n/a

Medical Academy of Latvia (RSU)

R: strong V: good

R: limited V: none

R: moderate V: narrow

n/a n/a

University of Latvia

R: strong V: narrow

R: strong V: moderate

R: limited V: narrow



Latvian University of Agriculture

n/a n/a n/a R: moderate V: narrow

R: limited V: moderate


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Table 8 Evaluation of acadiemic capacity at the universities in 2003

University of Latvia Riga Technical University

Latvian University of agriculture

Riga Stradins University

Daugavpils University

Branch of competency

Prof

esso

rs

Stud

ents

Cap

acity

*

Prof

esso

rs

Stud

ents

Cap

acity

Prof

esso

rs

Stud

ents

Cap

acity

Prof

esso

rs

Stud

ents

Cap

acity

Prof

esso

rs

Stud

ents

Cap

acity

Natural sciences

Biology 17 436 66.4 2 233 1.7

Environment 7 397 12.3 3 107 8.4 0 52 0.0

Chemistry 8 313 20.5 13 290 58.3

Sciences of engineering

Chemistry

Forestry 25 902 69.3

Material sciences 7 430 11.4

Agriculture

Agriculture 17 853 33.9

Forestry 10 917 10.9

Food processing 12 795 18.1

Veterinary medicine 9 323 25.1

Medicine

Medicine 19 436 82.9 62 1605 239.5

Pharmacy 1 61 1.6 0 269 0.0

* Capacity (index of academic competency) = (number of professors)2 x 100 / number of full time students Source: Council of Higher Education, 2003


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4.1.1. Pharmacy Higher pharmaceutical education in Latvia can be acquired in Medical Academy of Latvia, the Faculty of Pharmacy, in the University of Latvia, the faculties of Medicine and Chemistry, as well as in Riga Technical University, the Faculty of Materials Science and Applied Chemistry. The secondary education in this field can be acquired in Riga Medical School No.1, where they have the Department of Pharmacists.

Figure 19 Number of students dedicated to Pharmacy, Biomaterials & Organic Chemistry

330

130

0

308

130

30

292

165

363

120

40

150123

40

160

Chemistry Chemical technology Pharmacy

1993 1998 2003 Enrolment 2003 Applications 2003


Today, the Faculty of Pharmacy of Medical Academy of Latvia offers the pharmacist’s and the pharmacist assistant’s studies programs. The duration of the studies is 5 and 4 years respectively. There is also a possibility to get a Master’s degree in clinical pharmacy and healthcare, in two years’ time. The pharmacist’s qualification program includes: knowledge of drugs’ manufacturing, analysis, and determining the ability of methods’ appliance; knowledge of the principles of drug manufacturing in chemists and drug factories; the abilities to ensure the drug turnover in health care system. This study program includes: Subjects of chemistry (inorganic, organic, analytical, medical, biological), Subjects of medicine (anatomy, cytology and genetics, normal and pathological

physiology, microbiology, environment health, pharmacology, pharmacotherapy and catastrophe medicine, psychosomatic medicine and basic psychotherapy, emergency medicine),

And the special subjects of pharmacy (pharmacognosys, pharmaceutical chemistry, technology of drug types, practical pharmacy).

Besides these there are also such subjects such informatics, biology of flora and fauna, etc.

Different educational practical tasks have to be done in order to establish theoretical knowledge. The last (the 5th) year of the studies is almost completely dedicated to practical training in different pharmaceutical institutions – chemists, drug quality


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control labs, production units. In the fifth year the students are introduced to some specific subjects of pharmacy – phytopharmacy, information and history of pharmacy. The main subjects in The pharmacist assistant’s program are: Cytology and genetics, biology of flora and fauna, anatomy, microbiology, normal

physiology, pathological physiology, social healthcare and epidemiology, psychosomatic medicine, catastrophe medicine,

Inorganic chemistry, qualitative and quantitative analysis, organic chemistry, biochemistry, medical chemistry, toxicological chemistry,

Subjects on pharmaceutical and medical products, pharmacognosys, technology of chemists’ drug types, pharmaceutical chemistry, practical pharmacy, industrial technology of drug types, pharmacology, pharmacotherapy, social pharmacy and pharmacy legislation, pharmaceutical information.

Master’s program in clinical pharmacology includes the following subjects: drug pharmacodynamics, pharmacokinetics, metabolism, activities in quality and safety guarantee measures, and economical grounds of drug usage. The studies include, for example, Medical chemistry, courses in clinical pharmacokinetics, toxicology and laboratory medicine (the main aspects that determine the drug resolution, collocation, elimination and biotransformation, the usage of these aspects in prediction of drug interaction), Courses in clinical pharmacokinetics, toxicology, and laboratory medicine (the main aspects that determine the drug resolution, collocation, elimination and biotransformation, the usage of these aspects in prediction of drug interaction), biochemical mechanisms of toxicity, methods of lab analyses, Pathology, Integrated pharmaceutical chemistry (knowledge about drugs, their chemical structure, mechanism of their pharmacological action, and rational pharmacotherapy), Pharmacoeconomics and informatics. The second important institution offering pharmaceutical education is the University of Latvia, the Faculty of Medicine. There is a Bachelor’s program that was established three years ago. The following subjects are included: Anatomy; physiology, microbiology, cellular biology, Analytical chemistry, biochemistry, Pharmacognosys, pharmacology, pharmacokinetics, technology of drug types and

studies on drug substances. This faculty ensures further studies in pharmacy – two years in the Master’s program and after that the Doctor’s program. In the field of practical studies the Faculty of Medicine cooperates with around 10-15 medical institutions and clinics. As regards to pharmacy, the Faculty of Materials Science and Applied Chemistry of Riga Technical University offers the professional studies program “Drugs and their bioactive substances”, in which the engineer’s qualification can be acquired in time of two years. The program includes: Chemistry and technology of polymer, chemistry and technology of silicates,

process analysis and management, experiment planning and results processing,


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production unit projection, chemical processes control and automatisation, computer projection, physical and chemical research methods, material ageing and protection,

Methods of organic synthesis, physical research methods of organic connections, chemistry and technology of medical substances, technology of pharmaceutical preparations, finished drugs’ types, medical chemistry, bioorganic chemistry, biochemistry, chemistry and technology of medical substances.

The same professional studies program is provided in the Master’s program, duration of the studies is 2,5 years. The special subjects in the Master’s program: Biochemistry, bioorganic chemistry , medical chemistry, Organic synthesis, methods of organic synthesis, refining and analysis of organic

conjunctions, the physical research methods of organic conjunctions, structures of organic conjunctions, interrelationship of biological activities.

Chemistry and technology of medical substances, bioactive substances and drug types, technology of pharmaceutical preparations, finished drugs.

4.1.2. Biomaterials & Organic chemistry The only significant educational institution of biomaterials sector is Riga Technical University, the Faculty of Materials Science and Applied Chemistry. The educational possibilities in the field of organic chemistry are provided by the Faculty of Chemistry of the University of Latvia and by Riga Technical University. The duration of Bachelor’s program in chemistry technologies is 4 years. The special subjects are: Bioceramics and technology, testing of biomaterials in vitro, basic technologies of

biomaterials, bioorganic chemistry, biological compatibility and bioactivity of materials, organic syntheses, methods of organic synthesis, the physical research methods of organic conjunctions.

The Master’s program offers the following supplementary subjects: Chemistry and technology of biomaterials, bioceramics and technology, crystal

chemistry and mineralogy of biological tissues and their substitutes, testing of biomaterials in vitro, testing of biomaterials in vivo, basic technology of biomaterials, biopolymer and technology, human anatomy and structure of biological tissues, the methods of microanalysis of hard substances, biomechanical compatibility of implants, biological compatibility and bioactivity of materials organic chemistry in biomaterials technology.

The most concentrated educational program is the professional studies program Chemistry and Technology of Biomaterials, which lasts two years. The main subjects in this program are: Chemistry and technology of polymer, Chemistry and technology of silicates,

methods of microanalysis of hard substances, physical chemical research methods, ageing and protection of materials, studies on materials,

Process analysis and management, experiment planning and un results processing, production unit protestation, control and automatisation of chemical processes, computer modelling,


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Basic biotechnology, biological compatibility and bioactivity of materials, bioceramics and technology, biomechanical compatibility of implants, crystal chemistry and mineralogy of biological tissues and their substitutes, biopolymer and technology, chemistry and technology of medical substances.

There are special disciplines in Material sciences studies course, which are connected to this section. The studies are provided in Bachelor’s, Master’s and Doctor’s programs, although extended studies are provided only in the Master’s and Doctors’ program. The disciplines are: Technologies of biomaterials bioceramics and technology biopolymer and technology.

The subject Organic and Inorganic Chemistry in Riga Technical University is offered within a separate study course in the Faculty of Materials Science and Applied Chemistry in Bachelor’s, Master’s and Doctor’s program. Special subjects in Bachelor’s program are: Industrial organic chemistry, informatics of chemistry, physical research methods

of materials, chemical reactions engineering, computer modeling of chemical processes,

Bioorganic chemistry, methods of organic synthesis, analysis and purifying of organic conjunctions, organic synthesis, reaction types of organic synthesis, electron offsets and mechanisms of bonds in organic conjunctions, physical research methods of organic conjunctions, practical preservation/restoration of organic materials.

The subjects of research in the Doctor’s program are: Methods of modern synthesis, stereoselective synthesis, medical chemistry,

heterocyclic conjunctions chemistry. The Faculty of Chemistry of the University of Latvia is the biggest centre of higher education if taking into account the number of students and academic personnel. The studies are provided in Bachelor’s, Master’s and Doctor’s programs. Bachelor’s program includes the basic subjects of chemistry, for instance: Basic chemistry, inorganic chemistry, analytical chemistry, organic chemistry,

physical chemistry. Master’s program includes: Inorganic chemistry, organic chemistry, analytical chemistry, physical chemistry,

environmental chemistry, food chemistry and didactics of chemistry, The linked subjects are: water and food analysis, air and soil analysis, analysis of

organic substances, environment pollution and its localization, food chemistry, chemistry of natural substances, organic synthesis, spectroscopy of organic conjunctions, chromatography, forensic medicine etc.

4.1.3. Medical engineering Since there is only one high school of engineering in Latvia – Riga Technical University -, it has the privilege of educating the new specialists on academic and college level. In the field of optical equipment the University of Latvia can be pointed out, which trains specialists of similar type. There is a studies program connected with prosthetics also in Medical Academy of Latvia.


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Figure 20 Number of students dedicated to Medical Engineering

5035

6

75

25

110107

51

115

44

13

4044

13

160

Medical engineering Prosthetics Optometry



As regards medical equipment engineering, a special studies program was established recently in Riga Technical University, the Faculty of Transport and Mechanical Engineering – medical engineering and medical physics. This study course is offered in the 1st and 2nd level professional studies programs. The 2nd level professional studies program offers the opportunity to get an engineer’s qualification in four years’ time. The following special subjects are offered in this studies program: Anatomy and physiology, introduction in biomechanics and biomaterials, basic

biochemistry and biophysics, introduction to medical physics, physical methods in treatment and diagnostics,

Introduction to medical engineering, measurement, computer systems in medicine, medical technology projection, medical instruments and equipment, analysis of biological signals, medical equipment production technology, electronics in medicine,

Physiological measurements technique, structural base of human life’s functions, physiological systems, mechanics of biological systems, rehabilitation methods, aural and visual sensors, biomechanics,

Methods of spectroscopy in medicine, radiation physics and its reflection in medicine, radiation therapy, radiation protection, biomaterials, computer-based systems and methods of medical statistics, medical equipment safety, ultrasound technique, environment physics, patent training.

There is no Bachelor’s program offering this kind of specialization, although all the courses of the Master’s program offer such special disciplines as: biomaterials, biological signals’ analysis, basic biochemistry and biophysics, theory of the border layer, methods of spectroscopy in medicine, anatomy and physiology. The specialized course of the Master’s program - engineering physics, medical engineering and medical physics - includes the following disciplines: the structural base of human life’s functions, mechanics of biological systems,

physical methods in treatment and diagnostics, anatomy and physiology, radiation therapy, methods of spectroscopy in medicine.


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Medical instruments, projection of medical technique, biological signals’ analysis, computer-based systems in medicine, physiological systems, physiological control, aural and visual sensors, methods of rehabilitation, mechanics of biological tissues, and their reflection in medicine, medical equipment safety,

Physical studies of material, radiation physics, ultrasound technique, radiation protection.

Besides medical equipment engineering, Riga Technical University also offers the studies program of Bionics and prosthetics. This course is offered for college education, Master’s and Doctor’s program levels. Yet, this course is not popular among students; this is why the program is not offered for Bachelors and professionals studies students. Practically all the new specialists have prosthetics in their studies program, but the number of students taking bionics is very small. Prosthetics includes the following subjects: human biomechanics, organization and management of purposed human moves, anthropomorphic spatial mechanisms and systems, materials and technology of prosthetics, projection of prostheses and orthoses, prostheses manufacturing and prostheses workshops’ management, equipment, technology. The Faculty of Rehabilitation of Latvia Medical Academy keeps academic school of othosys and prosthetics. It offers a four year professional studies program of technical prosthetics. The special disciplines offered by Latvia Medicine Academy are: Anatomy, physiology, pathology, biology, clinical disciplines, Basic disciplines of engineering (physics, studies and treatment of materials),

subjects on medicine and engineering , orthosys and prosthetics, rehabilitations. Specialists of optometry are prepared in the University of Latvia, the Faculty of Physics and Mathematics in Bachelor’s, Master’s and professional studies programs. The percentage of subjects in the Bachelor’s program: biology-9%, chemistry-12%, medicine and ocular physiology-24%, engineering and others -55%. In the Master’s program special attention is drawn to such subjects as applied and ophthalmic optics, frontal eye diseases, clinical diagnostics, contemporary problems with lenses, modern problems, pathology of binocular eyesight etc. There are also possibilities to specialize, for example, in physiological optics or neural sciences.


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4.1.4. Environment & Biotechnology Two major educational centres represent this subsection – The Faculty of Biology of the University of Latvia and the Faculty of Rural Engineering of the Latvia University of Agriculture. In other educational institutions connected with environment science biotechnological methods are not the subjects of interest.

Figure 21 Number of students dedicated to Environment & Biotechnology

450

6040

450

65 50

460

70 60

138

27 20

240

62 60

Biology Environment engineering Environment & Watermanagement



The Faculty of Biology of the University of Latvia offers studies of biology in Bachelor’s, Master’s and Doctor’s programs. The main disciplines are: Theoretical biochemistry and molecular biology, cellular biology and genetics, Experimental biology - biochemistry, molecular biology, cellular biology,

microbiology, biotechnology, virology. The environment studies course offered by the Faculty of Rural Engineering of the Latvia University of Agriculture can be considered correspondent to the section of environment and biotechnology. Biotechnologies can be considered as a supplementary course of such disciplines as ecology, water management, limnology and hydrobiology, waste management. The subject of biotechnology in this section can be joined together with the following subjects: Biotechnological systems and their components, main stock and productions,

photosynthesized stock, Preparation of culture medium, fermentation (anaerobic, aerobic, periodical,

feeding up fermentation, continuous, sterile, non-sterile), basic physiology of microorganism cultivation, constructions of active fermentation agents, process control and management, fractioning of fermentation products, separation, concentration and purifying of the final product, product quality assessment,

Bioconversion of materials containing lignocellulose and starch, ecological and economical assessment of biotechnological processes, the usage of biotechnological methods in environment pollution reduction, basic principles of sewage purification, composts and their preparation.


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Minimal attention to biotechnologies is paid in the faculty of Materials Science and Applied Chemistry of Riga Technical University in the studies program of environment and production chemical correspondence, (microbiology and chemical analysis), as well as in the Faculty of Power of Electrical Engineering of the Riga Technical University where it is as a part of the course in environmental sciences studies (water chemistry and microbiology). The course if included in Bachelor’s and Master’s studies program.

4.1.5. Food Biotechnology In the sphere of academic education 2 major educational centres can be pointed out in this section – the Faculty of Chemistry of the University of Latvia and the Faculty of Food Technology of Latvia University of Agriculture.

Figure 22 Number of students dedicated to Food Biotechnology

315

80

200

35

390

100

250

40

471

126

300

4585

41 377

91

47 377

All levels Bachelor 2nd proffesional Master


Source: Central Statistics Bureau, Universities, VL BALTIC calculations, 2003 The professional program Food chemistry and expertise is provided by the Faculty of Chemistry of the University of Latvia. Studies include such subjects as food chemistry, methods of food analysis, food microbiology, quality management systems, food safety management and risk analysis, food legislation, food technology, and biotechnology, EU requirements on food quality etc. The Faculty of Food Technology of Latvia University of Agriculture offer several courses of studies. Courses in food science and food technology are interesting in relation to food biotechnology. However, the presence of biotechnology sciences in theses courses is trivial.


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4.2. Programme for Universities Reform One of the most important purposes of Latvian Universities Reform is to establish the centres of doctorants of Latvian universities. Establishment of the centres of doctorants of the universities is connected with unification of academic and infrastructural potential of the universities with a view to rationally use the resource, to meet the quantitative indicators of results and resources provided in the “Guidelines for development of higher education, science and technologies”. By taking into account the universities’ profile analysis, specialisations of the centres of doctorates of universities to be established are defined, and these are the following:

University of Latvia – science and mathematics, humanitarian sciences, social sciences, business and law, pedagogy (total costs EUR 2 million)

Latvian University of Agriculture – sciences of agriculture, food and veterinary medicine sciences, forest and wood sciences (total costs EUR 1.6 million),

Riga Technical University – engineering sciences (total costs 2.1 million), Daugavpils University – sustainable education, filology (total costs EUR 0.16

million). Insert 1 Programme for Universitu Reform & new centres of doctorants

The Universities Reform is regulated by article 7 of Transitional provisions in the Law on Higher Education and by the Education Development Conception for years 2002 to 2005 providing integration of higher education and science, improvement of professional skills of academic personnel, attracting the new generation of the scientists, as well as a new procedure of financing and payment. The lack of single strategy in the policy of Latvian Universities Reform has caused decrease of the number of scientific professionals and lecturers with the highest qualification – doctors and habilitated doctors – 7 times as much in last twelve years. At the same time, the number of universities in last twelve years has increased from 12 (in 1990) up to 37 (in 2002), bet the number of students has increased from 46 000 (in 1990) up to 119 000 (in 2002). It is planned according to the Higher Education and Universities National Development Conception that in 2010 there could be around 150 000 students studying in the state universities. Taking into account the average showings of OECD states there will be 15 students for one lecturer and it is foreseen that accordnig to the Law on Higher Education there should be at least 50% of academic personnel having a doctor’s degree, so in 2010 at least 4 700 doctorants will be needed to work in the universities of Latvia. The Universities Reform has been established to prevent the above-mentioned negative trends and to include the Latvian universities in the system of the European universities as provided by the international conventions, declarations and treaties. The Universities Reform programme has single purposes and aims yet its implementation is not a short-term activity. Taking into account the duration of the programme, which is till 2007, the whole of the programme or its separate parts can be implemented.


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Table 9 Programme for Universities Reform, estimated results

Indicators Current situation (2003)

Planned (2007)

Human resources

Number of students at universities 64 826 65 000 Number of doctorants 1 200 3 000 Number of professors 249 700 Number of doctors actively involved in R&D at universities

1 400 2 800

Financial resources State budget dotation for higher education at universities

0.4 % of GDP 0.7 % of GDP

State budged dotation for science at universities

0.04 % of GDP 0.4 % of GDP

External private financing for education in universities

25 % of budget 45 % of budget

External financing of international projects for education in universities

1 % of budget 5 % of budget

Financing of PHARE and EU structural fonds

EUR 10 million EUR 100 million

Resultative indicators The number of specialists to be prepared (per year)

15 000 16 000

including professional and master’s programmes of second level

20 % 35%

The number of doctorants prepared (per year) 90 250 Number of SCI publications of universities’ personnel (per year)

300 720

Infrastructure Intra-universities doctorates schools, establishing the support management and analytical

centres of doctoral programmes;

Newly-established science and technologies space connected with universities and

research institutes;

Optimising and modernisation of the existing infrastructure of universities and institutes.


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5. R & D Institutions

5.1. Financing of academic science and R&D Total financing of academic science and R&D granted by the Ministry of Education and Science in 2003 amounted for EUR 9.1 million, which can be divided into two parts: grant financing - EUR 6.2 million; financing of branch programmes - EUR 2.9 million. As a result of Latvia’s participation in the Fifth Framework Program of EU (5-IP) five centres of excellence of European level were established in Latvia – Institute of Solid State Physics at University of Latvia, Latvian State Institute of Wood Chemistry, Institute of Physics at University of Latvia, Institute of Atomic Physics and Spectroscopy at University of Latvia, Biomedical Research and Study Centre at University of Latvia. Insert 2 Sixth Framework Program of EU (6-IP)

At present Latvian scientists prepare to take part in the sixth Framework Program of EU (6-IP) which is the main instrument of EU of getting financing for researches in Europe. The total budget of four years’ period from 2003 till 2006 is 17.5 billion EUR which is 17% more than of 5-IP. 6-IP has defined seven main fields that require improvement of knowledge and ensuring the technological progress – genome research and biotechnology for health; information society technologies, nanotechnologies and nanosciences; aeronautics and space; food safety; sustainable development; economics and social sciences. In order to get the greatest possible effect particularly these fields have been allocated more than 12 billion EUR. Public priorities It is defined in the National Concept of Science Development of Republic of Latvia that the priorities of science development in Latvia are: information technology; material sciences; forest and wood; organic synthesis, biotechnology, biomedicine and pharmacy; letonica. The Ministry of Education and Science of Republic of Latvia have defined its priorities in Latvia’s collaboration with EU according to EU thematic programs of science and technologies and participation of Latvian scientists in these programs in the following fields; information technology and telematics; life sciences and biotechnology (biomedicine, drug construction, biotechnology); new materials and technologies; ecology and environment protection. These basic principles are important for University of Latvia to get involved into the common European space of higher education and science in accordance with Bologne Declaration.


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5.2. R&D financing and performance indicators among Biopharma related areas

In 2003, the financing for the applied research for the institutions related to Biopharma R&D was EUR 1.30 million whereas the financing for the basic research was EUR 1.74 million. Figure 23 and Figure 24 shows the breakdown of the basic researches. As it can be seen in the figures, the breakdown is comparatively similar both in the research sectors and the institutions receiving that financing.

Figure 23 Distribution of state financing among basic research areas in 2003

Biology10%

Biochemistry4%

Pharmacy technology1%

Natural Resource Ecology and Management

1%

Chemical engineering15%

Biomaterials3%

Biotreatment of wood resources

4%

Molecular biology & virology

8%Microbiology & biotechnology

6%Health and Human

Performance30%

Agricultural and Biosystems Engineering

13%

Forestry5%

Source: State Science Council granted basic research areas 2003, VL BALTIC calculations

Still, if the amount of financing being compared to the number of the scientific staff in the respective sector, it can be seen that comparatively large amount of financing per researcher is in the Biomedical Research and the Study Centre at the University of Latvia (EUR 5 244), the Institute of Biology (EUR 2 350), the Latvian State Forestry Research Institute “Silava” (EUR 2 230), Riga Technical University (EUR 1 845) and the Latvian State Institute of Wood Chemistry (EUR 1 595). Remarkably smaller amount of financing is granted, for example, to the Latvian Institute of Organic Synthesis (EUR 1 190) and the University of Latvia, Riga Technical University and Latvian Academy of Medicine.

Figure 24 Distribution of state financing among R&D institutions in 2003


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Latvian Institute Of Organic Synthesis

12%

University of Latvia4%

Riga Stradins University13%

LU Institute of Microbiology and

Biotechnology4%Riga Technical University

7%

LU Institute of Biology9%

Latvian State Institute of Wood Chemistry

7%

Forestry Research Institute "Silava"

5%

Other18%

P.Stradins University Clinical Hospital

4%

LU Biomedical Research and Study Centre

10%


7%

Source: State Science Council granted basic research areas 2003, VL BALTIC calculations

Figure 25 Distribution of state financed market oriented researches in 2003 and Figure 26 Distribution of state financed market oriented researches among R&D institutions in 2003 show the state financing for the market-oriented researches in 2003 into breakdown of the themes and the research organisations. When analysing the amount of financing per researcher, the institutions can be pointed out which have been granted larger financing. As a result it appears that the most successful institutions attracting the financing are four research institutions: the Biomedical Research and Study Centre at the University of Latvia (EUR 3 859), the Institute of Microbiology and Biotechnology at the University of Latvia (EUR 3 262), the Research Centre “Sigra” (EUR 3 103) and the Latvian State Institute of Wood Chemistry (EUR 2 035). Comparatively small financing has been granted to the Latvian Institute of Organic Synthesis (EUR 685), the Institute of Biology (EUR 720) and Riga Technical University (EUR 450). These numbers partly reflect the strongest research institutions, since the financing is granted according to the tendering competitions, thus reflecting the most successful and most promising authors of the researches. Yet it has to be kept in mind that, for example, the financing for the Latvian Institute of Organic Synthesis consists of a relatively large amount of contract works and orders from the foreign pharmaceutical companies, and this is why the state financing is no longer so important.

Figure 25 Distribution of state financed market oriented researches in 2003


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Molecular biology & virology

16%

Natural Resource Ecology and Management

3%

Biotreatment of wood resources

9%


Bioengineering9%

Pharmacy technology3%

Animal breeding biotechnology

9%

Orcharding material technologies

3%

Development of pharmaceutical products

12%

Health and Human Performance

7%Agricultural and

Biosystems Engineering 9%

Forestry8%


Source: Ministry of Education And Science, Market oriented researches among Latvian institutions,

2003, VL BALTIC calculation

Figure 26 Distribution of state financed market oriented researches among R&D institutions in 2003

Dobele Selection Station

4%

LU Biomedical Research and Study

Centre14%

LU Institute of Microbiology and

Biotechnology8%

LU Institute of Biology5%

P.Stradins University Clinical Hospital

5%Latvian University of

Agriculture5%

Research Centre SIGRA

9%

Latvian Institute Of Organic Synthesis

14%


3%


16%

Other17%

Source: Ministry of Education And Science, Market oriented researches among Latvian institutions,

2003, VL BALTIC calculation

Table 10 Main Institutions and their scientific staff related to Biopharma sector in 2003

Name of the institution Scientific Staff

Latvian University of Agriculture 190Latvian Institute Of Organic Synthesis 187Latvian Academy of Medicine (Riga Stradins University) 177Latvian University of Agriculture 162University of Latvia 80


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Latvian State Institute of Wood Chemistry 75Institute of Biology 65Riga Technical University 65Latvian State Forestry Research Institute “Silava” 36LU Biomedical Research and Study Centre 33Research Centre SIGRA 27Institute of Experimental and Clinical Medicine 24LU Medicine Faculty Center of Experimental Surgery 24LU Institute of Microbiology and Biotechnology 21LU A. Kirhenšteins Microbiology and Virology institute 20LU Institute of Aquatic Ecology 19Skriveri Selection Station 15Priekuli Selection Station 13Latvian Institute of Cardiology 12Institute Of Biomedical Engineering And Micro Technologies 4

Figure 27 Number of SCI citations among biopharma related areas, 1975- 2001

331

1467

3079

3492

12304

0 2000 4000 6000 8000 10000 12000 14000

Biology

Biotechnology & bioengineering

Medicine

Biochemistry & molecular biology

Chemistry

Source: Latvian Academy of Sciences, 2003 However, it is possible to identify that the most competitive research centres with regard to the technologies development and the transfer to the Biopharma sector are:

The Biomedical Research and Study Centre at the University of Latvia, The Institute of Microbiology and Biotechnology at the University of Latvia, The Research Centre “Sigra”, The Latvian State Institute of Wood Chemistry, The Latvian Institute of Organic Synthesis (also to be included in this list,

taking into account the competitive capacity in attracting international financial sources).

5.3. The best cases among competitive R&D institutions


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5.3.1. Biomedical Research and Study Centre, University of Latvia

Genome database of the Latvian population - national system of genetic information for genotyping of the Latvian population. The aims are search and genotyping of disease genes and genetic monitoring of patient risk groups for diagnostic and therapy purposes. Biomedical Research and Study centre (BMC) of the University of Latvia, the largest institution for molecular and biomedical research in Latvia, serves as the main processor and store, explore and analyses the genomic material. A company “Genome Database” and State Genome Register will be established within BMC. Research centers, clinics and primary institutions of medical service collect the sample material and prepare the needed personal and medical information about the sample donors. Other institutions involved in the project are: Latvian Medical Academy, State Centre of Medical Genetics, P. Stradiņš Clinical University Hospital, Latvian Centre of Cardiology, Latvian Centre of Oncology, State Centre of Haematology, State Centre of Forensic Medical Examination. Person identification database - precise and rapid methods of person identification, based on DNA analysis. Special regions of human DNA are selected with a high structural variability among individuals. These regions are selectively amplified and analyzed by contemporary gel-electrophoresis and data processing methods. Up to 15 various human DNA regions are included in analysis what allows to reach 99.99999% reliability of person identification. This method in Latvia is already adopted in paternity and other identity detection, particularly of armed forces, especially for troops involved in active military actions, rescue operations etc. International certified methods and analytical equipment is already used in DNA analysis. Chimeric viral proteins as vaccine, diagnostic, and gene therapy tools - better understanding of molecular background of protein immunogenicity and antigenic/immunogenic presentation of epitopes; constructing of new highly immunogenic proteins of desired specificity as potential new generation of vaccines and targeted carriers for gene therapy.

5.3.2. Institute of Microbiology and Biotechnology

Biodegradable polymeric composed materials for agriculture and food packaging Investigation of the microorganism resistance mechanisms to extreme environmental conditions in relation to storage and compatible solute accumulation and interaction, such as polyhydroxyalkanoates (PHA), polyphosphates, trehalose, glycerol and others. Iinvestigation of the physiology and physical characteristics of PHA-accumulating bacteria and biodegradation characteristics of PHA-based polymeric materials. With the aim to develop new biodegradable polymeric materials to be applied in agriculture and food packaging various PHA-based polymeric compositions properties are studied in collaboration


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with the Institute of Polymer Materials, Riga Technical University and Faculty of Food Technology, Latvia University of Agriculture and Latvian State Center of Plant Protection. Biotechnological conversion of renewable resources and use of its products Bioconversion of renewable resources into biofuel and valuable byproducts is developed. Starch and sucrose containing raw material is converted in ethanol and/or oligofructans ( as functional food additives ). This project provide the National biofuel program with scientific and technological information.

Collaboration with Institute of Experimental and Clinical Medicine (UL); Institute of Food Technology (Latvian Agriculture University); hospital “Biķernieki”, Center of Gerontology; Latvian Academy of Medicine; GKSS Research Center Geselschaft GmbH Institute of Chemistry, Teltow, Germany, as well as with Latvian enterprise “RNS-D-Preiļi” and “Rīgas piena kombināts”. Enzymatic conversion of sucrose Method for production of fructans - levan and fructooligosaccharides. Levan is promising as food additive and in medicine as plasma substitute, drug activity prolongator and an antihyperlipidemic agent. There are reports on radioprotective and antitumor activity of this compound as non-specific immunomodulator. There is an application for fructooligosacharides in the food industry as a prebiotic promoting growth of healthful microorganisms in the intestine. The new and efficient method of purification of levansucrase from Gram-negative bacteria Z.mobilis was developed.

5.3.3. Research Centre SIGRA Feed Technology and Animal Nutrition Carries out research activities and concludes the contracts on the scientific elaborations, advises in feed-stuffs preparing and animals’ feeding; wet grains conservation and feeding technologies; improvement of combined feed composition; the new progressive fodder crops approbation and extension in the domestic animals feeding. Veterinary Medicine Carries out research activities and concludes the contracts on the scientific elaborations, advises in following issues of veterinary medicine: animals’ infectious and non-infectious diseases, incl. diseases of reproductive system and udder diseases, metabolism and new born animals diseases; veterinary genetics; disease treatment, serums, vaccines, medicines development and production, veterinary pharmacy; diseased animals rearing.

5.3.4. Latvian State Institute of Wood Chemistry Main research areas: The protection and modification of wood and wooden materials; Pulp and paper production processes;


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The fibre properties of paper, cellulose and lignin structure; Cellulose derivatives, natural polymers for medical and veterinary applications; Poly-saccharide chemistry; Biotechnology and bio-engineering; Extractives for the production of plant protection agents and disinfectants; Polymer chemistry; Heat-insulating materials;

Industrial waste water treatment by radiation methods.

5.3.5. Latvian Institute Of Organic Synthesis The main fields of IOS competency are:

synthesis of biologically active organic compounds, heterocycles, organometallics, amino acids and peptides,

synthesis of new biorganics by asymmetric synthesis and investigation of reaction mechanisms,

development of microwaves application in organic synthesis, development of preparative methods for the synthesis of complicated

molecules, intelligent design of pharmacophore model for ligand-receptor interaction, physical organic chemistry, quality assurance and analysis of biological active substances, pharmacology, biochemistry and cell biology, screening of cardiovascular, CNS, active anticancer and antibacterial

compounds, design and target-oriented synthesis of new compounds

5.4. Latvian certified laboratories There are also other separate R&D institutions, such as certified laboratories of the Latvian National Accreditation Office (LNAO), which were established within the existing chemical companies and state institutions serving for various product testing and certification needs.

Table 11 Nationally certified Labs

Institution Scope Non Profit State Enterprise "Certification Centre of Latvia" LATSERT

food, perfumery and cosmetic, games and toys, fuel, tabacco

National Environmental Health Centre Microbiological Laboratory

microbiological tests of cosmetic, food, drinking water and clinical materials

National Environmental Health Centre Hygienic Examination Laboratory

chemical and physical-chemical tests of food, raw materials, mineral and drinking water, alcohol, wrapping materials, polymers, perfumery and cosmetic, toys, interior air and


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air of workshops LLC Genera Lab DNA tests Joint-stock company DZINTARS Testing and Texnical Control Laboratory

organoleptical, chemical, physical-chemical, microbiological tests of cosmetic; organoleptical, chemical and physical-chemical tests of perfumery and detergent of dishes

Microbiological Laboratory of Riga Environmental Health Centre (plus similar laboratories in every district)

microbiological tests of food, raw materials, cosmetics, water, environmental objects, pharmaceuticals, surgical materials, washing water; microbiological tests of contagious and clinical materials, serological tests and identification of microorganisms

National Environmental Health Centre Radiological Laboratory

radiometric and dosimetric measurements of food and environmental objects

Toxicological Laboratory of Latvian State Scientific Enterprise RAŽĪBA

analyses for determination of pesticides, polychlorbipheny and nitrate in food, plants, water and soil, analyses for determination of oil products in water and soil

Biochemical laboratory of state non-profit scientific enterprise SIGRA

chemical and physical-chemical tests of fodder and it recast products

Central Laboratory of State Grain Inspection

mechanical, chemical, physical-chemical tests of grain and all-mash

Forest Products Testing Laboratory Of Latvian State Institute Of Wood Chemistry

physical-chemical tests of charcoal, active carbon, californiuv and turpentine

Laboratory Department of Latvian Environment Data Centre

chemical, physical - chemical and radiometric tests of environmental objects; chemical and physical - chemical tests of emissions

Laboratory of Wood Protection and Emission from Wood Based Products of Latvia State Institute of Wood Chemistry

biological, mycological, physical-chemical and chemical tests of wood-pulp, wood materials and wood preventives; determination of formaldehyde emissary in wood materials


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5.5. Legal framework & IP rights

5.5.1. Legislation on medicines The most important legislation governing operations with medicines are the following:

Pharmacy Law, accepted in Saeima in 1997. Last amendments of the Pharmacy Law adopted on April 16, 2003.

The Law “On legal procedure of movement of drugs and psychotropic substances”. Adopted in 1996.

The Law “On precursors”, adopted in 1996. Its aim is to regulate the operations of physical persons and legal persons with precursors (substances that can be used for producing drugs and psychotropic substances) and to prevent getting of these substances into illegal movement.

Latvian Cabinet Regulation No 432 “Regulations on drug manufacturing and control” (12.12.2000, amended in 08.12.2003). The EU legislation norms worked into this regulation set the requirements to be observed for opening and functioning of drugs production company. These regulations also govern the procedure of drug manufacturing and control, except for veterinary drugs and veterinary-pharmaceutical products, as well as answers the question what is a good production practice.

Latvian Cabinet Regulation No 381 “Regulations on drug registration” (10.31.2000, amended in 08.19.2003). These regulations answer the following questions: what is the procedure of registration of drugs to be included in drugs register, what registers and reregisters drugs, what is the procedure of drug reregistration, why and how the validity of drug registration authorisation is suspended and in what cases drug registration is refused. The regulations include the table of colouring substances allowed to be present in drugs, additional requirements for registration of homeophatic drugs, drugs produced from human blood and blood plasma, immunological and radiopharmaceutical drugs. Drugs are registered or reregistered by the State Agency of Medicines. This regulation is prepared based on the Pharmacy Law. It contains the EU norms for documentation to be submitted for registration of drugs in Latvia.

Latvian Cabinet Regulation No 41 “Procedure of drug advertising” (01.30.2001, amended in 08.12.2003). It contains the EU directive’s requirements for drug advertising.

Latvian Cabinet Regulation No 88 “Regulations on drug import, export and distribution”(02.27.2001, amended in 08.12.2003). The principles of the European Community worked into the regulation provide that it is necessary to supervise every stage of drug distribution. These requirements are regarded as equal to requirements set by the World Health Organisation.

Latvian Cabinet Regulation No 104 “Regulations on supervising the side effects caused by the use of drugs” (03.06.2001.) This regulation contains the EU directives and it regulates supervising of the side effects caused by the use of drugs (except veterinary drugs). Regulation provides also the responsibilities of drugs registration card owners in the field of supervising the side effects caused by the use of drugs.


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Latvian Cabinet Regulation No 138 “Regulations on drugs classification and over-the-counter drugs” (03.20.2001, amended in 07.29.2003).

Latvian Cabinet Regulation No 207 “Requirements for opening and operation of drugstores” (05.22.2001).

Latvian Cabinet Regulation No 312 “Procedure of clinical research of drugs and pharmaceutical products” (09.12.2000). Last amended on September 9, 2003. Regulation was prepared on the basis of the Advertising Law, the Pharmacy Law and the EU No 75/318EEC mutatis mutandis and in accordance with the basic principles of good clinical practice. The regulation provides protection of the research subject, the necessary information given on the packing of the research subject supervising and procedure of registration and supervision of clinical research, as well as storage of data about clinical research.

Latvian Cabinet Regulation No 396 “Procedure of evaluating the conformity of good drug producing practice and procedure of issuing the certificate of good drugs production practice to drug manufacturing companies” (09.01.2001).

Latvian Cabinet Regulation No136 “Procedure of drug labelling and the requirements to be set for drug care-labels” (03.25.2003). This regulation regulates the procedure of drug labelling and requirements for drug care-labels in accordance with the requirements provided by the EU Directive No 2001/83 EC.

Latvian Cabinet Regulation No 234 “The procedure of issuing, suspending, reregistration and abolishing the permission (licence) for pharmaceutical operations, as well as the procedure of evaluating the conformity of drugstores, drug supermarkets and drug producing companies and of evaluating the good distribution practice.” (04.02.2003).

5.5.2. Gene research legislation The project of the genetic research order was presented during the meeting of the State Secretaries in July 2003. It determines that genetic research is scientific research of DNA and other tissue components. The aim of the project is to determine the connection between genes, gene products and their inherent characters. The research includes instrumental analysis of tissue samples and the description of DNA acquired, the description of health and comparative computer analysis of genealogy using the methods of bioinformation. It is allowed to start genetic research when positive affirmation is received from the database administrator and from the Central Committee of Medical Ethics, which confirms that the principles of aesthetics are observed in a certain research program. When submitting the program or the project of genetic research to the main genome database administrator and to the Central Committee of Medical Ethics, the following things should be indicated in the notification – the aims, the volume, the executers of the project, sources of financing and range and selection criteria of gene donors involved in the project.


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It is allowed to do the genetic research only if codified genealogies, samples of tissue, descriptions of DNA and descriptions of the state of health are used. The genetic data obtained in the process of the genetic research will be stored in the unitary State Database of Human Genome. Data referring to a certain gene donor will be put into the State Registry of Human Genome to be used in diagnostics of gene donors’ diseases, treatment, prophylaxis and epidemiological researches. It is allowed to store the following anonymous and non-codified data concerning genetic research in the Database of Human Genome – overall scientific information that determines the interconnection between genes, gene products and inherent characters, as well as tissue samples and descriptions of health as a common database, if it includes tissue samples and health descriptions of at least five gene donors. The regulations are to come into effect in January 1st, 2004. In July 2003 the Saeima accepted amendments in the Law on Human Genome Research. According to these amendments the law will come into effect next year – in January 1st, 2004. The aim of the law is to regulate the creation and function of State Database of Human Genome, to regulate genetic researches, to ensure that genes are donated voluntarily not perforce, to ensure confidentiality concerning gene donors’ identity, as well as to protect persons from misuse of genetic data and discrimination regarding genetic data. The law will stimulate modernisation of pharmacy and biotechnology industry in Latvia, as well as it will attract foreign capital to researches of genome and data usage.

5.5.3. IP protection in Latvia Protection of intellectual property in Latvia is based on a law harmonized with the legislation of the EU countries and international agreements and conventions. Protection of intellectual rights in Latvia are governed by: Law on copyright and neighboring rights“ - addopted on 11 May, 1993.

o 1995 - accession to the Bern Convention ON THE PROTECTION OF LITERARY AND ARTISTIC WORKS;

o April 1997 - accession to the Geneva Convention ON THE PROTECTION OF PRODUCERS OF PHONOGRAMS AGAINST UNAUTHORIZED DUPLICATION OF THEIR PHONOGRAMS;

o March 1998 - accession to the Rome Convention ON THE PROTECTION OF PERFORMERS, PRODUCERS OF PHONOGRAMS AND BROADCASTING ORGANIZATIONS.

Industrial property rights protection is governed by the following acts: Patent Law - adopted on 30 March, 1995. In connection with the chemical sector,

the law provides for the procedure of the patenting of pharmacy products:


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o if the object of the invention is a substance which may be used as a medicinal or veterinary product covered by the provisions of the laws in force on pharmaceuticals requiring obligatory testing and registration of that product before putting it on the market in the Republic of Latvia, or a process to obtain such a substance, or a new application of a known substance in a medicinal or veterinary product, the applicant must submit to the Patent Office a copy of an official document confirming the registration of that product with a competent state authority, which is designated by the effective laws on pharmaceuticals, or a copy of an identical document, certified by the above mentioned authority, which allows the product to be placed on the market;

o if the object of the patented invention is a substance covered by the provisions of the effective laws on pharmaceuticals requiring obligatory testing and registration of a medicinal or veterinary product before putting it on the market in the Republic of Latvia, or a process for manufacturing such a substance, or a new application of a known substance, the Patent Office may, at the request of the patent owner, extend the patent term, but no more than for 5 years.

o The patent shall be in force in the whole territory of the Republic of Latvia including inland and territorial waters.

Law On Trademarks Law on Industrial Design Protection Law on Plant Varieties protection o Accession to: Paris Convention on the PROTECTION OF INDUSTRIAL

PROPERTY; PATENT COOPERATION TREATY, Madrid Agreement concerning the INTERNATIONAL REGISTRATION OF MARKS, Budapest Treaty on the INTERNATIONAL RECOGNITION OF THE DEPOSIT MICROORGANISMS FOR THE PURPOSES OF PATENT PROCEDURE

The Latvian Patent Office was re-established on 26 November, 1991, and according to experts, legislation on intellectual property protection is already brought into line with international requirements, and, therefore, no changes are expected to take place in this area in the near future.


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5.6. Technology transfer and co-operation links By noting and compiling information about cooperation of R&D institutions and commercial companies we get overall review about transfer of technologies from research into production. Broadly speaking, we still have to note that there is quite a big gap between research and commercial production and service sector. There is quite close cooperation among Biopharma R&D institutions in the field of research. The following R&D institutions are having the most intense cooperation: Latvian Institute Of Organic Synthesis, Institute of Microbiology and Biotechnology at University of Latvia, A. Kirhenšteins Microbiology and Virology Institute at University of Latvia, Biomedical Research and Study Centre at University of Latvia, University of Latvia, Institute of Biology, Research Centre SIGRA, Institute of Experimental and Clinical Medicine and Latvian State Institute of Wood Chemistry. These institutions are closely interconnected. The rest of institutions are less interconnected in cooperation. These institutions have also integrated well into the international R&D cooperation net. Latvian Institute Of Organic Synthesis is particularly involved in wider cooperation. Insert 3 New drug invention, technology transfer and track record of Institute of Organic Synthesys

Invention and development of a new drug lasts for around 10 years and its costs can constitute around half a billion dollars. Because of this there are not many pharmacy companies producing original drugs although these drugs are the most profitable ones. Also in Latvian companies “Generix” drugs constitute most of the assortment, but the few original drugs have been manufactured in the soviet period when the scientists were allocated money for drug synthesis. In the world 20 to 25 completely new drugs are manufactured every year. Millions of dollars are spent to invent these drugs because the process of synthesis, testing and experiments is long lasting and expensive. Very often it turns out that out of ten synthesized substances only one is useful to become a complete product. In its existence the OSI has created 17 new drugs and they comprised 25 % of the total production of the USSR, which is considered a very high indicator of productivity in the world context. Within the USSR system drug manufacturing in Latvia took place according to the following scheme – the OSI synthesizes a drug, but the existing “Grindeks” as an experimental factory of OSI manufactures it. At that time and in that place actually all original preparations of Latvian pharmacy organisations vere developed. By looking at cooperation of R&D and production/service sector we come to the conclusion that there is only a few R&D institutions that are the source of innovations and research for Latvian production companies. Five institutions can be mentioned that have accomplished several commissions for Latvian companies:

Latvian Institute of Organic Synthesis (Grindeks, Olainfarm, Medpro); Latvian State Institute of Wood Chemistry; Research Centre SIGRA (Fitosan); A. Kirhenšteins Microbiology and Virology institute at University of Latvia

(Larifans);


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Institute of Microbiology and Biotechnology at University of Latvia (Rīgas Raugs, Rīgas Vīni).

Once again, if the amount of the developed products is evaluated, Latvian Institute of Organic Synthesis should be mentioned as the greatest R&D centre in Biopharma setor. The Institute of Organic Synthesis has worked out 17 original and more than 60 re-synthesised medicaments, as well as their production technologies, including for export, a big share of which are produced by Latvian firms: Grindeks –16, Olainfarm – 11, and MedPro – 3 preparations.

Table 12 Products developed at Latvian Institutions for productions sector

Latvian Institute Of Organic Synthesis Grindeks Cefalexin anti-bacterial preparation L-Asparaginaze anti-cancer, anti-leukemia preparation Citarabins anti-cancer, anti-leukemia preparation Ftorafur** anti-cancer, anti-leukemia preparation Leakadin** anti-cancer, anti-leukemia preparation Tioguanin anti-cancer, anti-leukemia preparation Angiotensinamide cardiovascular preparation Fenihidin cardiovascular preparation Foridone** cardiovascular preparation Mildronate** cardiovascular preparation Bisakodil medication against diarrhea Bromheksin medication against cough Dezaminooksitocin uterotropic preparation Oksitocin uterotropic preparation Benperidol psychotropic preparation Droperidol psychotropic preparation

Olainfarm Izoniazid anti-bacterial preparation Nitrofurazon (Furacilins) anti-bacterial preparation Furagin** anti-bacterial preparation Solafur** anti-bacterial preparation Furazolidon anti-bacterial preparation Midantan (Amantadin) CNS agent Rimantadin** anti-virus preparation Ciklofosfan anti-cancer preparation Imifoss** anti-cancer preparation Tiotefa anti-cancer preparation Furadonin anti-bacterial preparation MedPro Fentanil analgesic Diludin stabiliser of carotene Ciazon veterinary preparation against helminths

Research Centre SIGRA


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Fitosan Fitomedicaments Anti salmonesys vaccine Anti vaccine for pig red meat disease

LU A. Kirhenšteins Microbiology and Virology institute Larifans

Lariphan antitumoral and immunomodulating


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6. Industry and main sub-sectors

6.1. Manufacture of finished forms and generics This is the greatest sub-branch of the sector the output of which constituted around EUR 14 million in 2002. The proportion of export is not large and constitutes around 3%. It is coplicated to determine the productivity and the value added, but together with active ingredients the productivity constitutes around EUR 26 000 of output per employee. The most remarkable companies operating in this sub-branch are two large companies: “Olainfarm”and “Grindeks”, and the medium-sized companies “Medpro”, “Baltijas Terapeitiskais Serviss”, “Farma Balt” and “LMP”. The Latvian leader in the context of number of the original drugs is JSC “Olainfarm”, which manufactures 10 kinds of drugs - tranquilisators “Mebikars”, “Amiridīns”, “Fenibūts” drugs for treatment of heart and blood vessel diseases “Etacizīns”, “Etmazīns”, the anti-allergic preparation “Fenkarols”, drugs for gastric diseases “Furagīns”, anti-cancer drugs “Ciklofosfāns” un “Imifoss”, as well as its most popular drug – anti-influenza drug and preventive preparation for tick-bone encephalitis “Remantadīns”. All these drugs were invented and brought to market in the soviet period. In general “Olainfarm” at present manufactures around 75 drugs. The original preparations constitute around 60 % of turnover for the company, manufacture of generic drugs - 30 %. Substances are purchased for all generic drugs. “Olainfarm”manufactures drugs already since 1972 and once it used to be the third largest factory of production volume in the USSR. At present the company manufactures 353 million tablets and 10.4 million capsules per year. It constitutes 13 894 packings of finished drugs in total. JSC “Grindeks” has more than 100 products in its product portfolio. Only two of them are the original products - the heart treatment and preventive preparation “Mildronāts” and the anti-cancer drug “Ftorafūrs”. Also the subsidiary companies of “Grindeks” produce original preparations – the factory in Tallinn produces anaesthetic and anti-irritation ointments “Kapsicam” and “Viprosal”. The original preparations “Mildronāts” and “Ftorafūrs” constitute a remarkable part of turnover and profit. In 2001, in the group of the finished drug “Mildronāts” alone constituted 27 % of the sales volume. “Ftorafūrs” (the finished drug and only its active ingredient) constituted 14 % of total turnover last year. In total the original products constitute 51 % of “Grindeks” budget from selling the finished drug forms and 40 % from the total sales. “Mildronāts” is the co-product of “Grindeks” and OSI, and it appeared in the market in 1989. This drug protecting the cells of the organism is exported to the Baltics, Russia and CIS. This year the company plans to expand it sales also in Poland. “Mildronāts” is a prescription drug, but in 2000 “Grindeks” manufactured its over-the-counter form. The other drug invented in the soviet period - “Ftorafūrs” – for already 30 years is exported to Japan, to be more precise, not as a finished drug but as it active substance.


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6.2. Manufacture of active pharmaceutical ingredients This sub-branch is characterised by it large export content; almost all active pharmaceutical ingredients produced are exported. The company’s output comprises around EUR 8.5 million. The most remarkable companies in this sub-branch are “Grindeks”, “Olainfarm” and “Medpro”. 10 % of the “Olainfarm” turnover is constituted by manufacturing of active ingredients and half-products. These products are exported to approximately 20 different world countries, the most important markets being Switzerland, the USA, Japan, and New Zealand. The proportion of active pharmaceutical ingredients in the sales volume of “Grindeks” is 23%. The “Medpro” company in contrast to “Grindeks” and “Olainfarm” is particularly specialised in synthesis of active pharmaceutical ingredients. At present 11 substances are synthesized in the company, out of which 6 are manufactured constantly. 80 % of “MedPro Inc.” substances is exported to the Central Europe, the Western Europe, CIS, Australia, Egypt, Brasil, etc., as well as to India. Apart from its basic activity the company is planning to purposefully expand manufacturing and bringing nearer to the market food supplements and the final drugs. In the nearest as well as in the distant future the sub-branch will remain important for the latvian companies because manufacturing of active substances is a field in which it is rather easy to find the market outside the region in contrast to manufacture of the original preparations and generic manufacture, thus diversifying the markets for the company. Besides this sub-branch is very profitable because it requires high level of competence. The Latvian companies operating in this field have such competence which is proved by the fact that production is exported also to India, the country which is considered to be the leading country in manufacturing substances. Most likely, the companies will attempt to increase the proportion of this sub-branch.

6.3. Manufacture of injectibles This is a significant sub-branch and the turnover of the companies operating in this field is around EUR 1 million. No doubt, the largest company specialising in production of injectibles is “Kalceks”. Apart from “Kalceks” there are several small drug-manufacturing companies that produce injectibles as one of the forms of preparations, but their capacity is not large for the present. “Fitosans” could be mentioned as one of such companies that produces injectibles for veterinary purposes. At present injectibles as a drug form is produced also by the company “Larifāns”. The “Kalceks” company in contrast to the other companies involved in the sub-branch operates already for a long time, for more than 60 years. The “Kalceks” of today is specialising only in development and production of injectibles. Production range consists of injectibles filled in glass ampoules. 1; 2; 5; 10 ml ampoules are also made in "Kalceks" from glass tubes. The “Kalceks” range of products has reached 47 different injectibles in the following therapheutical groups:


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- preparations with influence on the central nervous system - preparations with influence on the peripheral mediatorous processes - cardio-vascular preparations - regulators and stimulants of metabolic processes - antimicrobial - amplifiers of nephritic functions - injectibles for narcosis.

Most of the injectibles are produced for Latvian market; the rest of it is exported to the markets of the Baltic States and CIS. In future the most important development project in the sub-branch of injectibles is the factory of capacity of 55 million apoules per year planned by the “Kalceks”. Also the company “Grindeks” is interested in construction of such factory in order to produce around 100 million ampoules per year. At present “Grindeks” does not produce injectibles but places manufacturing agreements in a Lithuanian company (around 25 million ampoules per year). The new factory is planned to be constructed in the territory of the “Grindeks” company and to be completed in 2006. The approximate investments could constitute EUR 10 million. Obviously, “Grindeks” will also hold ownership in this production unit. This new production unit that will meet the requirements of GMP will completely replace the existing “Kalceks” units of manufacturing. Most probably in the nearest future the small Latvian companies developing and manufacturing injectibles will locate their production in other companies because their capacity is not that large to establish their own injectible lines meeting the requirements of GMP.

6.4. Cosmetics & fitopreparations By judging the data of the Central Statistical Bureau the idustrial output of this sub-branch constitutes EUR 12.9 million and the value added constituted EUR 5.6 million. Productivity in this sub-branch in 2002 constituted around EUR 24 000 EUR of output per employee. The total amount of export in this sub-branch constitutes only 8.7 %, yet in comparison with 2001 it has increased in 20%. The largest manufacturer in this sub-branch is JSC “Dzintars”. Its turnover in 2002 was EUR 12 million. Apart from JSC “Dzintars” also several, mainly small companies operate in Latvia, for example, JSC “Spodrība”, LLC “Medicamina”, LLC “Lori” un LLC “Silvanols”. The assortment of the leader of the sub-branch, the JSC “Dzintars”, includes around 350 different products. At present the company produces two large groups of products: perfumery and cosmetics, but it is also planned to develop the pharmaceutical scope of cosmetics production. 30 % of the production is distributed in Latvia, but 70 % of prodction is sold outside Latvia. The largest export markets are Russia, Ukraine, White Russia, Kazahstan, the Baltics, as well as Spain, Iceland, Sweden and the USA. The main advantage of the JSC “Dzintars” in export is recognition of its brand in CIS. The company has its chain of stores in Latvia, as well as in Moscow, St. Petersburgh, Lithuiania and stores are planned to be opened in


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Estonia. The company holds the ISO 9001 and GMP Cosmetics certificate. Since 1998 around EUR 6 million have been invested in the industrial premises and equipment. The company is developing very dinamically by showing high turnover increment rate; in 2002 the increment rate constituted 13%. Manufacture of cosmetics production is also one of the activity scopes for JSC “Spodrība”. In 2002, cosmetics constituted 16.8 % of the total amount of production sales of JSC “Spodrība”. The company’s turnover in 2001 was EUR 1.9 million (the approximate level of 2000). Apart from manufacturing different household chemicals the JSC “Spodrība” continues to develop manufacture of different body care products. At present the company manufactures shampoos, hair conditioners, cremes, bath additives, liquid soap, etc. In 2002, the JSC “Spodrība” exported 10 % of the produced cosmetics to Estonia and Lithuania. The company is planning to invest around EUR 0.12 million in establishing GMP. Scientific manufacturing enterprise “Medicamina” Ltd. develops and produces cosmetics by using natural substances. Originally the company manufactured rimesive meant for treatment of burns and wounds. It manufactures medical goods as well as cosmetics. In the laboratory of LLC “Medicamina” around 100 types of different medical and cosmetics preparations are developed, but only around 20 are manufactured. Among these such cosmetic preparations as hand and foot cremes, shower honey, shaving cosmetics and and facial care products, massage oils, etc. are manufactured. The segment of the standard cosmetics in Latvia is full and it would be hard for “Medicaminai” to enter the market, that is why the stress is laid on manufacturing and realisation of products of natural origin. At present almost all of the production manufactured by the company is sold in the Latvian market, being distributed in drugstores and supermarkets. Market for cosmetics has been also found in Russia and at present the first batches of production are exported there. From time to time the production is realised also in the West in small amounts. The company’s turnover in 2002 slightly exceeded EUR 0.1 million. “Lori” is a small company the main scope of production of which is perfume. In the last years more than 20 preparations of perfumery, household chemicals and veterinary have been produced. The list of the final products of “Lori” Ltd. included also 8 names of phyto-lotions, shapoos, etc. Yet, the production of the final products of “Lori” Ltd. comprises only 5 - 7 % of the company’s turnover. The fnal production of the company is mainly realised in Latvia, but almost all the perfume is exported. Latvian drug manufacturer “Silvanols” has submited three of its oldest preparations - the ointments “Rinogēls”, “Osteogēls” and “Trombogēls”- to the Lithuanian Drug Register. If the preparations will be registered, “Silvanols” will initiate export to Lithuania already this year. “Silvanols” operates in the field of pharmaceutical cosmetics and produces six kinds of ointments: “Rinogēls”, “Osteogēls” and “Trombogēls”, as well as “Plantogēls”, “Bronhogēls” and “Dentogēls”. The company is not large, only 10 employees, but the productivity indicator is remarkably higher then the average of this sub-branch, that is EUR of 21 000 outputs per employee. The company operates in the local market, but it is planning a remarkable proportion of export in its realisation.


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In further development of the sub-branch it is foreseen that several new companies will emerge that most probably will strive to operate in different segments of the field out of which manufacturing of phyto preparations could be one of the main specialisations. Cosmetical pharmacy could be a perspective also for development of the small companies.

6.5. Telemedicine Telemedicine is a modern branch of medicine that has wide possibilities of development in any country, yet at present in Latvia this branch is only in its initial position. Development of this branch is certainly delayed by the small local demand that is connected with comparatively law patient costs and paying capacity of patients in general. Telemedicine services in Latvia were introduced already in 2000 and up to 2003 three private companies were involved in providing such services. At present only one company “LLC Telemedica” has remained in the market. “LLC Telemedica” provides telemedicine services in the field of cardiogram. The company ensures for the patients transmition of electrocardiograms to the doctors, analysis and, where appropriate, ensures also fast response. The company functions rather successfully in spite of the unfavourable situation in the market. Its estimated annual turnover exceeds EUR 0.1 million. Apart from telemedicine services there is also the sub-branch of telemedicine equipment and software design and production. At present the “Integris” company has the greatest success. Apart from other products it also develops and produces telemedicine equipment and software for processing cardiograms. The clients of this company are only western companies and institutions, which partly supports the assumption that Latvia’s market is in its initial stage for development of the telemedicine sub-branch. Several small projects deal with development of telemedicine equipment and software, these are carried out in the University of Latvia and the Medical Academy of Latvia. Actual functioning of telemedicine sub-branch could attract developing of information systems in healthcare institutions - healthcare data bank systems, analisation, storage.

6.6. Biomedical equipment production According to the data of the Central Statistical Bureau, in 2002 the output of this sub-branch constituted EUR 7.8 million and its value added constituted EUR 3.4 million. The average productivity indicator was EUR 13 000 of output per employee. According to the data of the Central Statistical Bureau, 598 people are employed in this sub-branch, and the export content is 15.1%. The statistics on this sub-branch includes many medical instances and companies involved in manufacturing prostheses and ocular optics for the local market. This is the reason why these numbers show only the approximate actual situation in the sub-branch. Two significant companies manufacturing laboratory equipment operate in manufacturing biomedical equipment: “ELMI” and “BioSan”. Also the company


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“Baltrons” can be mentioned in this sub-branch, that manufactures different measuring instruments for the healthcare sector. Productivity in these companies is around EUR 28 000. “Elmi” Ltd, founded around ten years ago, invents and manufactures laboratory equipment mainly for microbiology, medicine, etc. That is several centrifugal machines, shakers, water thermostats, mixers, etc. Every year “Elmi” invents two to three new products. Initially the company realised its productions mainly in Russia, but following the Russian economic crisis the company had to reorientate to the market of Europe and other markets. At present “Elmi” realises its production in many places in Europe, Australia, Japan, South Korea, Thaiwan, Africa, and the equipment is still exported also to Russia. 0.3 % of the production remains in Latvia. The largest export market is Switzerland. “BioSan” Ltd. also invents and manufactures equipment for laboratories, scientific researches and experiments (for molecular biology, bio-chemistry, microbiology, etc.). This company also operates in the market for around ten years. Around 10 new plants are manufactured in the company every year. Only around 3 to 5 % of the production manufactured by “BioSan” remains in Latvia. Plan of the company is to sell its production in 55 countries; at present it is exported to around 35 countries, mainly to Europe, also the USA, South America, South-East Asia. There is no doubt that this sector is attractive for the Latvian companies, because there are good possibilities of manufacturing marketable products of any field the production of which requires good inventory potential. At present there is a good scientific and practical basis for inventing different instruments of fine mechanics in Latvia, so a remarkable increase could be expected in this sub-branch in connection with the emergence of several new companies.

6.7. Biotechnology services This sub-branch very perspective in the world is actually presented in Latvia by one company “ASLA”. In 2002, the annual turnover of the company constituted around EUR 0.18 million and the productivity was EUR 31 500 of outputs per employee. Export content of the company’s output was 90%. ASLA is a company founded in 1999 by professional scientists with extensive international experience in microbiology, molecular biology, immunology and biochemistry. Company is excellent example of scientific research in biotechnology and transformations of this knowledge into commercial services. Company maintains PCR techniques, protein-protein interactions, GFP fusions, immunocytochemistry, controlled fermentations of microorganisms and small animal research. Main services are

gene synthesis and cloning Expression of proteins Polyclonal & pre-immune sera Monoclonal antibodies Pf1 phage for NMR analysis


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NMR protein standards Heavy isotope labeled proteins Custom researches

Export structure of ASLA is the following: USA: 30%, Sweden: 22%, Germany: 5%. In future new companies could emerge in this sub-branch, yet the number of these companies would be limited because this field requires very high level of competence and practically emergence of such companies could be connected with the spin–off companies at one of the existing institutes in Latvia.

6.8. Drug approval & clinical trials This is a service sub-branch for drug manufacturers that want to separate drug approval and clinical tests from their basic activity and to state those operations as outsourcing. Taking into account that in Latvia there is a very well developed branch of drug manufacturing and inventing, also the basic testing services and the clinical test Stage I – III services are developed respectively. The most remarkable suppliers of such services are the largest drug manufacturing companies “Grindeks” and “Olainfarm”, especially it applies to carrying out basic testing and Sage I test. Another remarkable supplier of this kind of services is the Institute of Organic Synthesis. Another several healthcare companies are involved in organising clinical tests in Latvia, including the “Documed” company. In future these services will certainly remain as competitive sub-branches based on the great experience and competence in producing medical remedies as well as the close collaboration with Latvian medical institutions. The most remarkable obstacle for further development of this sub-branch is the limited opportunities for carrying out Stage II and III tests in Latvia because often it is difficult to find the groups of the appropriate volume to be tested due to the small number of patients in Latvia in the context of general numbers. These tests could be also done outside Latvia but it would result in extra costs in the context of patients of the western countries and, on the other hand, cooperation with the eastern healthcare sector is problematic due to the weak legislation environment in this field.

6.9. DNA manipulation services This is a rather perspective sub-branch that could successfully develop because demand for manipulations with DNA is large in the world and it will certainly increase. Mainly it will be connected with the establishment of DNA data banks of population and wide use of DNA data in medical institutions. In Latvia there are three places where manipulations with DNA are carried out – in the private enterprise “Genera”, in the Gaiļezers hospital (Riga) and in the Latvian Police Academy. The laboratories of “Genera” and of the Latvian Police Academy are technically very well equipped and can provide high-quality services of DNA manipulations. Their equipment includes set of instruments produced by the “APLERA” production company.


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At present in Latvia services of DNA manipulations are used mainly by population and institutions in order to make filiation tests and identification tests, but in future these services will not be the most remarkable ones. For example, already now the “Genera” company develops DNA data bank of inhabitants to identify breast cancer. In future DNA data banks for identification of other illnesses could also be established. A remarkable and possible demand in nearest future could be Latvian Genome Project, realisation of which will require large amount of services of DNA manipulations. Suppliers of services of DNA sequencing in Latvia also have wide possibilities for export of such services and for providing outsourcing. Already now “Genera” provides such services for Scandinavian clients. Here the determining factor is the difference of costs between supplies of Latvian companies and regional companies. One has to admit that in long-term perspective such difference in costs will certainly equalise because it is based on costs of human resources. The possible development of this branch could also facilitate the establishment of the branch of bio-informatics in Latvia, yet at present the possibilities of establishing the branch of bio-informatics are vague if we speak about the local demand.

6.10. Other smaller sub-branches Pie citām vēl nepieminētām nozarēm vajadzētu atzīmēt biotehnoloģiju iekārtu ražošanu (JSC Biotehniskais Centrs), veterināro medikamentu ražošana (LLC Fitosan), herbal preparations and their finished forms (JSC Rīgas Farmaceitiskā Fabrika).


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7. Areas for potential investments

7.1. Potential growths areas of future biopharma R&D capacity

At present the most advanced in medium term Biopharma clusters in Latvia are pharmaceuticals & medicine, bioproduction, wood processing biotechnology and medical services. Out of these, pharmaceuticals & medicine, biotech supplies un wood processing are to be pointed out as the most advanced, that is why possible investments in these sectors are considered the most profitable and having the lowest risk factor. Bioproduction and medical services could be mentioned as the most perspective branches for medium term investments. Investments can be attracted to these sectors by developing educational and R&D systems, as well as by the increase of local demand. Development of other sectors like agrobiotechnology, food biotechnology and environmental biotechnology depends on complex development of these sectors and also on strengthening of economy of the state in general.

Table 13 Biopharma cluster infrastructure analysis matrix R & D

base Education Presence of

existing companies

Local & regional demand

Pharmaceuticals and medicine (drug development, diagnostics etc)

Excellent (4)

Good (3)

Excellent (4)

High (4)

Bioproduction (biomolecular or micro.organism production)

Excellent (4)

Medium (2)

Medium (2)

High (4)

Biotech supplies (processes, equipment instrument and services for biotechnological use, biomaterials)

Good (3)

Good (3)

Good (3)

High (4)

Wood processing biotechnology

Excellent (4)

Good (2)

Small (1)

High (4)

Medical services (lab tests, telemedicine, health information systems, bioinformatics)

Good (3)

Good (3)

Medium (2)

Good (3)

Agrobiotechnology (plant improvement, biological plant protection etc.)

Medium (2)

Medium (2)

Moderate (2)

Good (3)

Environmental Limited Limited Small Moderate


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biotechnology (soil-, water-, and waste treatment)

(1) (1) (1) (2)

Functional food Medium (2)

Limited (1)

Small (1)

High (4)

7.2. Particular areas for potential investments Pharmaceuticals and medicine manufacturing of active pharmaceutical ingredients R&D of new drugs and biologically active substances, materials Veterinary preparations

This sector is especially attractive because of the large R&D basis, based on the Latvian Institute of Organic Synthesis as well as on several smaller institutes. This is one of the sectors having the closest connection between production and the R&D. The sector is interesting also thanks to the high productivity showings and the value added. The value added composes around 15% of the production output, which is the highest indicator among the Latvian sectors related to the biopharma sector. This subsector has great perspectives also from the point of view of the global demand since worldwide synthesis of active substances is well paid and there is great demand for such service, as well as sales is easy because of the lack of the need for patenting and goods registration, those needs being an important issue for Latvian producers. The largest Latvian pharmaceutical companies are planning to extend their scope of active substances synthesis. At present there is large demand for such services from the developed Far East countries, especially from Japan. Production of new drugs is a more complicated work and is connected with heavy research and testing expenses; it is a long process as well. Still this sector is especially interesting because of the fact that Latvia has vast experience in drugs manufacture as well as large capacity. Thus, for example, around 600 active substances have been synthesised in the Institute of Organic Synthesis from which the potential drugs have been selected. Already now drugs are greatly manufactured for large Western companies, for example, the company “Merz & Co”. Large interest is awaked by the fact that the drugs manufacture trends are happening in the therapy groups which are very promising from development point of view, i.e. large number of patients in the world, and the lack of drugs, for example, anticancer drugs and drugs for treating Alcheimer’s Disease. In the field of veterinary preparations there are several complementary factors that create the attractiveness of this subsector. Firstly, it is the very high working labour productivity which at present comprises around EUR 50 000 a year per employee. Secondly, this is the strong R&D basis that has been successfully transmitting technologies to the production sector. At this point there is also a good connection with several educational and research institutions, as well as several original preparations, vaccines and food additives have been developed. At present this subbrach does not export, yet the demand for these products is large in the regional


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and the global markets and it is easier to enter those markets in comparison with the drugs production sector. Bioproduction R&D and production of bioreactors

The advantage of this sector is mainly a competitive R&D basis. The existing examples of technology transfer prove that in Latvia there is a great opportunity of acquiring new products in the niche, having good exports potential and high workforce return. Exports content can reach the level of 90%, and the workforce productivity of the existing examples reaches EUR 30 000 up to 85 000, which is much higher than the average productivity in the subsectors related to the biopharma sector. Judging by the analysis of the global demand it can be concluded that the Baltic Sea States, i.e. Sweden, Denmark, Germany and Russia, are having the brightest perspectives in this sector since the demand for bioproduction in these states is very large. Biotech supplies Medical equipment (orthosys, lab equipment, telemedicine)

This subbranch has the highest value added among other biopharma sectors. This showing reaches 77% of the value added level. This subbranch is characterised by comparatively high exports content – the average indicator is 15%, yet, for example, in the laboratory equipment production subbranch it reaches up to around 90%. Also in respect of the workforce productivity this subbranch stands above the average in the Biopharma sector, its productivity ranking from EUR 15 000 – 44 000 EUR a year per employee. There is an attractive demand for this subbranch in the global markets and it is obvious that the Latvian companies with their production can stand the competition in the international markets. Wood processing biotechnology R&D of new technologies and substances for biological treatment of wood (ex. Production of biotech products & technologies for biological treatment of wood Biotreatment of wood

This sub-branch is interesting because of the fact that Latvia is located in the region where intensive wood processing is taking place, so the demand for the services of this branch is large and wide enough for this sub-branch to successfully develop. At present the most important demand is in Sweden and Finland, partly also in the Baltic States. As concerns wood processing, Russian and Byelorussian markets are the most rapidly growing ones, thus it is foreseen that in the nearest future significant demand could be observed particularly in those states.


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The basis for this branch to be successful and strong is the R&D basis. Here one should point out the Institute of Wood Chemistry which is the main developer of technologies in Latvia. At present the operation of the Institute is successful, creating competitive technologies of the international standard. Yet, up to now, there has been the lack of the stage of transmitting the technologies to production, i.e. weak establishment of the spin-offs and start-ups, as well as the absorption of the technologies into the existing wood processing companies. Energy & biotechnology Production of biofuel & bioethanol

The attraction of this sub-sector can be seen in the fact that there is demand and resources in Latvia and in the region for using such technologies. As regards biofuel and bioethanol production, the advantages are the availability of the processing resources and the R&D basis. It has to be also noted that there will be demand for this kind of production, because the EU energy policy indicates towards the necessity for biofuel, and already now the Directives provide the amounts to be consumed. It is planned to increase this amount in the future. Medical services R&D of Health Information Systems, Lab Information Systems Lab tests, DNA tests, analzation of lab material Clinic test performance for Stage I & II Human Genome Research programme

The advantages of the sub-sector are the very strong R&D basis, as well as good transmittance of the technologies to the commercial sector. High level of productivity is presented by the clinic testing and drug approval operations, EUR 46 000 respectively, which is one of the highest showings in the biopharma sector. The showings of productivity in other sectors are not that high, yet it should be taken into account that these are relatively new fields and the companies have been operating in these fields only for a year or two. Despite the fact that these fields are not developed enough, they are already making exports. Thus, for example, the exports contents of the drug approval services sub-sector already reach 50%. Fulfilling the orders from the Western pharmaceutical companies, the exports content in the development of the LIS systems is around 30%, and the main markets at present are the CIS, whereas the DNA manipulation and testing services sub-sector exports content is 20% when servicing the Scandinavian research institutions. These examples clearly show that the Latvian services are competitive in the global market, although it should be noted that this competitive capacity is largely determined by the costs, which could decrease in the distant future.

Table 14 R&D Investment projects

Name Project owner

The analysis of immunosuppressive therapy used in kidney transplantation

University P.Stradins Clinic Hostpital

Development & Production of Environmentally friendly Development Agency of Riga


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equipment for Water & Air treatment Region Science & Technology Park, Organic synthesis, Pharmacy and Medical material Research and Production Centre


Water technology science Recearch and Consultation Centre


Science & Technology Park for biofuel Riga Technical University Development Centre for manufacture of Biomaterials and ecomaterials


Science & Technology Park “Gaiļezers” for Biomedicine

Riga Stradins University

Jelgava Science & Technology Park for Food quality and safety


Rīgas ZTP Biotehnoloģiju un vides tehnoloģiju inovāciju un biznesa atbalsta centrs


7.2.1. Human Genome Program in Latvia Latvian scientists have worked out a wide long-term state project “Human genome database of Latvia” which is being carried out. The aim of the project is to create an effective system of genetic information about people in Latvia in order to introduce the latest discoveries in genetics as soon as possible and to ensure good starting positions for the state on the eve of the coming revolution in the development of biotechnologies. Potentially this program could become the state program for the next decade until 2009. In the process of realisation of such a grand program it would not be wise to turn away from such problems as protection of individual genetic data, the ethical aspects of its practical usage etc. Before we start the creation und usage of the genome database, correspondent legislation and legal norms should be worked out. The scientific part of the project is comparatively small, in general the project includes the practical part, training, medical part and the scientific part which is already being financed on behalf of Latvian Council of Science by 0.17 million EUR as one of its programs (collaboration projects). In case of necessity the financing of the scientific part of the program could be slightly increased, but it is also necessary to attract extra financing to the program itself – around 1.6 million EUR for the first three years. Insert 4 Genome projects in the world

Many companies, especially in the USA, have been working on creating and analysis of local genome databases for several years. Recently they have started to work on creating a national genome database. There is a multinational private company DeCODE Genetics in Island (300 employees, 12 million USD starting capital). The company is planning to create a new genome database of 270 000 living Islanders and include genealogical information about their predecessors. There is a national program for the largest genome database so far that has been worked out in Great Britain. It will include information about 500 000 people (25 million GBP starting capital). Estonia has started preparatory work on creating a genome database of about 1 million people in five years, the cost of which could be estimated up to 150 million USD.


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Latvian Council of Science actively supports the project “Human genome database of Latvia” as one of the priority initiatives in promoting the modernisation of high technologies and the state, and it is ready to take active part in the process of realisation of the program.


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7.2.2. Programme for biofuel production At the end of 2003, in Latvia the bio-fuel production programme was accepted, which is intended to develop the production of fuel made of plants in Latvia, by taking into account the EU Directives. Insert 5 Production of bio-fuel in EU

The production of bio-fuel has to be developed because the European Union (EU) requires that in 2005 bio-fuel must constitute 2% of the total amount of fuel consumed in the state and by 2010 the proportion of bio-fuel has to reach at least 5.75%. This means that Latvia in 2005 will have to produce already 20 thousand tons and in 2010 75 thousand tons of bio-fuel, or else the required amount of bio-fuel will have to be imported from foreign countries. Such requirements are set for EU states to decrease pollution caused by the use of standard fuel. Bio-fuel is planned to be obtained from corn, oil plant seeds, rape seeds, etc. The programme evaluates the possibility of producing gaseous fuel from agricultural and urban waste. At present bio-diesel is produced in small quantities by the company “Delta Rīga”, but there are also projects for additional facilities with greater capacity, e.g., the project of the facility “Baltic Biodiesel” in the territory of Riga port. To implement the programme several measures have to be taken – coefficient and control measures – e.g., introduction of the bio-fuel quality control laboratories’ system. It is foreseen that alongside with the start of bio-fuel production also the question regarding the production of bioethanol necessary for Latvia will become topical, and also such project most likely would be implemented. The developers of the programme have laid down three possible scenarios for complying the requirements of EU Directives – to produce bio-fuel in Latvia and also to import or export it in the future and consume bio-fuel coming from other countries, but the third possibility is partial production and partial import of the necessary amount of bio-fuel. It is indicated in the programme that bio-fuel is made from raw materials not excised. Bio-fuel also does not contain petroleum products that are excised. In addition, it is possible in the process of bio-fuel production to obtain several high-value export goods, like rape cakes, rape oil meal, glycerol, mineral fertilisers, as well as dry distilling dregs for feeding-stuff. The construction costs of such facilities could be EUR 15 to 18 million.


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8. Conclusions

1. The most important in the way of output in the Biopharma sub-branch is production of pharmaceutical preparations, which includes mainly manufacturing of original preparations and generic preparations as well as synthesis of active ingredients.

2. Other remarkable branches in the way of output are manufacturing of biomedical equipment, cosmetics, perfumery and phyto preparations.

3. Less developed and episodically presented are the sub-branches of biotechnologies service, clinical tests and laboratory services.

4. The dominant position of the pharmaceutical sub-branch can be explained by the presence of all the necessary stages for sub-branch development, resp. R&D organisations (especially OSI), education programmes and flows of new specialists. The phenomenon of establishing this pharmaceutical cluster is explained by the fact that especially Latvia was the most important R &D centre and partly also the production centre in the former region of the USSR.

5. Latvia has a rather developed R&D basis in the following fields: organic synthesis, virology, microbiology, biotechnology, wood chemistry and selection. Less developed or underdeveloped are food biotechnology, environment biotechnology and medical engineering.

6. Almost all of the sub-branches, except pharmacy (organic synthesis, microbiology and virology) lack or have weak transfer links, resp. they there is lack of cooperation between the R&D and the companies as well as there is lack R&D technologies-oriented companies (spin-off).

7. Good study programmes in the universities are ensured in the fields of organic synthesis, pharmacy, biomaterials and biomechanics, medicine and genetics. Weak or nonexistent are the study programmes in the fields of food, agriculture, environment, and wood biotechnologies.

8. The lack of the business factor can be observed in practically all of the branches except pharmacy and medical equipment manufacturing.

9. By looking at all the factors in general it can be seen that there are two typical problems at present: preparation of the lacking study programme/specialists and transfer of technologies from the R&D sector into business.

10. In the nearest future the most successful could be the pharmacy branch and the branches of cosmetics/cosmetical pharmacy and medical equipment manufacturing.

11. In the distant future the biological treatment of wood could be developed, as well as the sub-branch of biotechnological researches and outsourcing of laboratories.

12. Without special promotional activities and initiatives such branches as agricultural biotechnology, food biotechnology and environment biotechnology will not develop at all.


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9. Suggestions for further sector development In this research there are several fields identified which are vitally important and could contribute most to development of the sector in the future. These fields could claim the financial support from the state, and they are as follows:

1. Drugs manufacture. At present most of the support in the most remarkable sector which is the biopharma sector should be granted to questions connected with drugs manufacture, since the present practice of selling the inventions in their stage of research does not provide the desirable return. It would be more profitable not to sell those inventions, but to develop them on the spot. At present the price of the inventions is tens of thousands, but if the inventions would be developed they could bring several millions. For this reason the possibilities of getting the state financial support should be considered. The question of patenting the inventions is still open because it is a rather expensive service (around EUR 10 000 – 50 000), and also in this field the state support would be necessary for those inventions to be protected and for the increase of the profit gained from the patents.

2. Support to the export progress of the original preparations. Concerning finished drugs produced in Latvia and their realisation in the Western markets, there should be distinction between the production of the Generix drugs and of the original preparations. Facilitation of the Generix drugs exports could be useless since in Latvia there are too many obstacles for progressing it. Attention should be paid to the support progress of the original preparations. In this respect there are interesting positions like herbal preparations, fito-preparations and veterinary medicaments. At present these preparations are produced for the local market but there is also demand for them in the region and worldwide, yet the companies operating in this sector are small and are having difficulties in acquiring financing for exports progress. Also at this point the state support would be of importance to acquire the Baltic market and probably also the Western markets. Support would be useful also in the production stage of those preparations because the companies have several products, but there are not enough financing for producing all the developed preparations.

3. Exports support to the medical equipment producers. Exports support would be important for the medical equipment and utilities producers. Mostly these companies are small, yet the products produced by them are unique enough to provide demand for them in the global market, including the Western market. For example, there are such companies as “Biotechnical Centre” and “Telemedica”. Also these companies could be granted support for certification of these products in the exports markets, which is a rather expensive process for these companies to be carried out by themselves.

4. R&D basis. No doubt, strengthening the R&D basis and transfer of technology also require the state support. At present only some R&D centres can be considered be rather successful in transforming the developed technology into the commercial sector, yet it can be seen that the transfer should be strengthened in several fields, like wood chemistry, biotechnology, gene engineering and medical equipment and machinery development. R&D basis exists in these fields but is not absorbed into business. State support


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would be important for facilitating the establishing of the start-up and spin-off companies. The support could find its expression in establishing technological centres and by way of supporting the commercialisation of the projects.

5. Education. It can be seen in the field of education that in general there is the teaching staff in all biotechnology sectors, except in the fields of food, agriculture and forestry biotechnologies. In view of the traditional sectors of Latvia the development of these educational trends would be important, therefore it would be vital to establish such trends. It would be also important to improve the technical basis for practically all the educational trends and to facilitate attracting of new students and doctorates to these specialties. It would be also significant to support cooperation between the training centres and the production sector by way of creating special training positions.


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10. Appendix 1. Company Profiles

10.1. ALFA VET LLC

General information

Contact details Address: Viestura prospects 73, LV-1005, Riga Telephone: +371-7395695 Fax: +371-7355288 E-mail: [email protected] Web-site: www.alfavet.lv

Background Veterinary doctors of veterinary firm "Alfa Vet" Ltd. provide 7 days a week consultations about care, feeding and health of animals. They also treat them, inoculate, perform microchipping (electronic marking), operate and answer on home visit calls. In the veterinary drugstore at Sarkandaugava one can purchase drugs for pet treatment, professional fodder, accessories and toys. In the wholesale shop of the veterinary firm "Alfa Vet" Ltd. trading with veterinary medical supplies, veterinary doctors can purchase veterinary medical supplies and care means for animals wholesale.

Core competencies and Technologies Wholesale of veterinary goods Veterinary activities

Products Indexel - electronic marking of animals Dog/cat vaccinations Frontline - effective preparation for extermination of fleas and ticks for dogs and

cats.

Human Resources Around 5 employees


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10.2. Amerikas-Baltijas Tehnoloģiju Korporācija LLC

General information

Contact details Address: Vairoga 4, Rīga, LV-1039 Telephone: +371-7840360 Fax: +371-7840357 E-mail: [email protected] Web-site: www.abtechnology.lv/en.htm President (owner): Mr. Krūklis Rinalds

Core competencies and Technologies • Wholesale of medical and surgical equipment and orthopaedic appliances • Wholesale of pharmaceutical goods • Service • Wholesale of medical equipment and apparatus

Products Virology and microbiology diagnostic preparations Laboratories Medical Instrumentation, Monitoring & Diagnostics Equipment

Financials Euro (thsd) 2001 2000 Net turnover 1709,0 1785,6 Production expenses of sold goods -1331,5 -1375,0 EBIT 377,5 410,6 Net profit 104,8 73,7 Employees 20 20


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10.3. Amerilat JSC

General information

Contact details Address: Šarlotes 1a, Rīga, LV-1001 Telephone: +371-7378330 Fax: +371-7828309 E-mail: [email protected] Web-site: www.amerilat.lv/jsc_amerilat.htm President: Mr. Švarcbergs Agris

Background AMERILAT was founded in 1991, as Latvian-American Joint Venture. It was mostly medical technical service company, which provided installation and service works for complicated equipment coming to Latvia and Russia from our American partners. From April, 1994 status was changed and it became Joint Stock Company. Founder of AMERILAT is international corporation “Minotaur International Enterprises Inc.”, USA. Since 1999 owner of JSC AMERILAT is “American Medical Technologies Inc.”, USA. At the end of 1999 for better management JSC AMERILAT formed two new companies: - INVITROS Ltd, Laboratory equipment - AMERILAT MD Ltd, Visual diagnostic equipment

Core competencies and Technologies Sales, installation, service and adaption of medical equipment, pharmaceutical

goods; New product development –technical research work and design of advanced

electronics and software for medical applications to renew our products, manufacturing of medical and surgical equipment and orthopaedic appliances, instruments and appliances for measuring, checking, testing, navigating and other purposes, except industrial process control equipment;

Research and experimental development of natural sciences and engineering.

Products Prostata Treatment System (PTS) (design and manufacture) - microwave prostate

treatment system AL-1204 PTS Mobile (developed, not manufactured) Provision of programmes for the systems (in the process of development) Cardio Control - medical diagnostic workroom Physical therapy, physiotherapy ad rehabilitation equipment Defibrillation equipment Operating and surgical-procedures tables Plastic surgery materials Equipment for minor surgery Emergency, catastrophe and military medicine equipment Pneumatic traction belts and collars Surgical threads


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Disposable sterile surgical wrappers, clothes and linen Own original products - a system for digital archiving and analysis of CT images

and system for diagnostic and treatment of prostate disasters, monitoring and uroflowmetry systems.

Co-operation and sales links Amerilat has a partnership with companies from 14 different countries in Europe, Asia and North America. Company collaborates with hospitals in almost all regions in Latvia and cooperates with Institute of Cardiology in Latvia. Amerilat are official representatives in Latvia of: Cardio Control NV, Holland, PC based diagnostic systems and specialised in the

development and sales Enraf Nonius, Holland, physiotherapy and rehabilitation equipment Airtrac MSI Inc., Korea, helps patients suffering from cervical or lumbar disc

problem (herniated nucleus pulposus, slipped disc), strain, spinal stenosis, degenerative spondylosis

PolytechSilmed Europe Gmbh, Germany, manufacturer of soft tissue implants GS – Elektromedizinishe Gerate G.Stemple Gmbh, Germany Dynek Pty Ltd, Australia, suppliers of surgical sutures Jiffy Craft Intl, Pakistan, Surgical & Dental instruments Farmeks, Ltd, Belorussia

90% of exports go to Russia, 10% to Netherlands.

Financials Euro (thsd) 2001 2000 1999 1998 Net turnover 1270,1 1543,5 2633,5 2651,2 Production expenses of sold goods -1210,9 -1591,9 2041,8 1934,5 EBIT 59,1 -48,4 925,6 569,9 Net profit -38,9 3,1 22,3 -71,5 Export % 3 40 15 20 Employees 13 15 50 50

Human Resources Today staff of company is 10 people, half of them are experienced engineers and IT specialists.


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10.4. ANK LLC

General information

1. Contact details Address: 11 Klusā Str., LV-1013, Riga Telephone: +371 7370570 Fax: + 371 7376061 E-mail: [email protected] Web site: www.ank-sia.com Commercial director: Mr. Aleksandrs Kangizers

2. Background ANK is experienced information systems company that has developed complete laboratory information system (LIS). Development of this product started in 1990. Today company create cost effective solutions for labs, therefore a range of “open-source” programs are used in IT system development. Company is excellent example of competence to build complete and integrated IS that encompasses nowadays technologies and suitable for large lab data processing.

Core competencies and Technologies

• Development of software • Automatization of processes in labs, production of automatization hardware

for clinics, immunology, biochemistry, serology • Software and hardware integration into complete LIS

- LIS includes registration, verification, analyzation, test units that are connected to network

• Service

Products Company so far have developed several products (LIS):

• MEDAP (current version v. 5.09) Running under MS Windows platform MEDAP L

- one computer driven automatization of lab capable to connect lab analizers and terminal MEDAP T

• MEDAP T - manual input terminal suitable for blood, urine, immunology,

biochemistry, serology analization • MEDAP LIS

- Complete network system for lab automatization (starting from inputs and ending with results)


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• Hematology counter • MEDAP_E

- Multi platform software. - According to standards HC7, LOINK, ASTM. Implementation of

DICOM is in process now. - SQL programming language, output in XML format, diversification of

network servers, INTRANET - Wireless bar code technology incorporation, AXIOME ALPHA

(BARman)

Financials EUR 2001Net turnover 60 000Production expenses of sold goods n/aEBIT n/aNet profit n/aEmployees 10

Co-operation and sales links Company serves local market and markets of CIS. Number of labs supplied with ANK are 12 here in Latvia, 10 in Russia, 4 in Ukraine and 2 in Belorussia.

Human resources Company employs 10 specialists that are highly qualified. Five of them are hardware engineers and the other half are programmers and IT specialists.


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10.5. ARBOR Medical LLC

General information

Contact details Address: Hospitāļu iela 55, Rīga LV-1013 Valdlauči, Ķekavas pag., Rīgas rajons, LV-1076 Telephone: +371-7620126, +371-7620179 Fax: +371-7620070 E-mail: [email protected] Web-site: www.arbor.lv Director: Ms. Dace Rātfeldere

Core competencies and Technologies Wholesale of medical and surgical equipment and orthopedic appliances Wholesale of pharmaceutical goods, equipment Used medical equipment and surplus medical supplies Service

Products Goods for family doctors Single use lab ware Medical equipment Laboratory equipment and medical devices Technical service, maintenance Repair of medical and laboratory equipment

Co-operation and sales links Company serves local market. Good co-operation have been established with Academy of Medicine in Latvia in field of seminars on medical equipment.

Human Resources Company staff consists of 21 employee.


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10.6. ASLA LLC

General information

Contact details Address: 121 Bauskas street, LV-1004, Riga Telephone: +371 7620876, +371 9142807 Fax: +371 7428038 E-mail: [email protected] Web-site: www.asla-biotech.com Chairman of the Board: Mr Ainārs Leončiks

Background ASLA is a company founded in 1999 by professional scientists with extensive international experience in microbiology, molecular biology, immunology and biochemistry. Company is excellent example of scientific research in biotechnology and transformations of this knowledge into commercial services.

Core competencies and Technologies PCR techniques

o Direct PCR and RT-PCR, semi-quantitative and quantitative, with different internal and external controls to evaluate the level of expression of target genes, to estimate a profile of protein expression.

Protein-protein interactions o GST and his tag fusions o Far Western Blot o Immunoprecipitation and Western Blot

GFP fusions o Live Fluorescent Protein fusions: regulated intensity, targeted to the

compartment. The LFP vector should be provided by customer. o Inverted fluorescent microscope monitoring of live cells o Selected stable cell lines expressing your LFP-fusion

Immunocytochemistry o Intracellular localization of protein of your interest o Protein-protein interactions in certain cell compartment by optical co-

localization Controlled fermentations of microorganisms

o Study of physiology of your target microorganism o Optimization of producer culture conditions for maximum product or

biomass yield Small Animal Research

o Toxicology


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o Safety Tests o Immune Response Evaluations o Vaccine Efficacy o Quality Control

Products & Services

Gene synthesis and cloning Expression of proteins Polyclonal & pre-immune sera Monoclonal antibodies Pf1 phage for NMR analysis NMR protein standards Heavy isotope labeled proteins Custom researches

Co-operation and sales links Range of customers includes: medical universities (Karolinska Institute, Sweden), R&D organisations (NIH, U.S.A.; Max Plank Institutes, Germany; Biomedical Research & Study Centre, Latvian University), research departments at hospitals (Karolinska Hospital, Sweden, St.Eriks Eye Hospital, Sweden), chemical companies (MedPro, Latvia, etc.) Export structure of ASLA is following: USA 30%, Sweden 22%, Germany 5%.

Financials Euro (thsd) 2002 2001Net turnover 187,6 189,3Production expenses of sold goods -73,9 -100,3EBIT 113,7 89,0Net profit 55,7 67,7Employees 6 6Export content 90% 90%


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10.7. BALTIC BIODIESEL LLC

General information

1. Contact details Address: 22 Ezera Street, Riga, LV-1034 Telephone: +371 7344806 Fax: +371 7344854 E-mail: [email protected] Director: Mr. Girts Fisers

2. Background The bio-diesel fuel production factory will be built in industrial park VEGA within the territory of the Freeport of Riga. New biodiesel plant is to be built in Riga port territory. The Board of the Freeport of Riga has voiced its support for the lease of land to Baltic Biodiesel for the construction of a biodiesel plant. Company will operate in the extraction of vegetable oil and conversion the oil into biodiesel fuel. Construction of the plant is set to begin this year (2003). According to the business plan, the vegetable oil plant should begin operations in January of 2005 and biodiesel production should commence on 1 July 2005. Apart from construction of bio-diesel production factory will be built a factory that will produce rape oil, which is the main component for bio-diesel production. The planned capacity of the factory will be approximately 75 000 tons of bio-diesel per year. Process in the plants will be automated and supported by test lab. Company will employ up to 10 specialists.

Core competencies and Technologies Hot extraction of vegetable oil Vegetable oil conversion into biodiesel fuel Wholesale of rape oil and biodiesel

Products Rape oil Bio-diesel Glycerine (grade 88%) Feed - stuff

Co-operation and sales links Within the next few years it is planned to make investments of more than 10 million euros for development of the factory. The project is being carried out together with German partner "Campa-Biodiesel GmbH", which is one of the largest bio-diesel producers in Europe.


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10.8. Baltic Instruments LLC

General information

Contact details Address: Aizkraukles 23-705, Rīga, LV-1006 Telephone: +371-7543292 Fax: +371-7543277 E-mail: [email protected] Web-site: Director: Mr. R. Smiļģis

Background Company was founded in 1991. Area of operation is design and production of various electronic and electromechanical apparatus for industry and research institutions.

Core competencies and Technologies Research and experimental development on natural sciences and engineering Electronic equipment, components Development, construction, manufacture, implementation of equipment and

machines Computation equipment and programme provision development,

scientific/technical production development, consultations Testing and implementation of new technologies

Products In field of biopharma company produces and supply with: Stomach pH-metres

- precise diagnostics of patient’s stomach acid secretion during endoscopy);

Automatic pH-metric systems - diagnostic of stomach acid secretion for up to 8 patients

simultaneously, determination of amplitude and intensity of oesophagus reflux for up to 4 patients simultaneously, 24-hour reflux testing and investigative stomach-oesophagus pH-metry for 1 patient;

Thermostats for verification of thermometers. Software

Co-operation and sales links Medical Academy of Latvia, University of Latvia, “Legedy”, “Centre of Processes’

Analysis and Research” - development of Automated gastroenterological express-diagnostics

Academy of Agriculture LU Institute of Polymer Mechanics


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University of P. Stradins Centre of Meteorology Institute of Pisciculture

Financials Euro (thsd) 2002 2001 2000 1999 Net turnover 133,0 97,9 35,2 42,9 Production expenses of sold goods -128,9 -96,8 48,9 51,4 EBIT 4,1 1,1 5,3 3,9 Net profit 3,3 1,0 1,4 0,2 Employees 7 7 7 9


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10.9. BALTICTRONS LLC

General information

Contact details Address: Rupniecibas Street 3-2, LV-1010 Riga Telephone: +371-7508012 Fax: +371-7508013 E-mail: [email protected] Web-site: www.schaefer-hoergeraete.de/baltictrons-ltd.html President (owner): Dr. Emils Melngailis

Background Company Baltictrons Ltd. was established in 1997. The Company belongs to Schäfer Hörgeräte GmbH, Germany. The priority of this company is to deal with medicine equipment, mostly hearing aids and audiology equipment for diagnostics. The Company covers sales and full technical support for all equipment. They are working not only with this product line, but also with medicine equipment for medical laboratories and hospitals.

Core competencies and Technologies Wholesale of medical equipment and goods Human health activities Service and maintenance of lab and medical equipment

Products Medical equipment for ears, neck and nose doctors Hearing-aids; accessories Hearing-aids batteries Hearing-aids repairing, programming Hearing loss determination LOR consultations

Financials Euro (thsd) 2002 2001Net turnover 171,0 177,6Production expenses of sold goods -96,4 -142,9EBIT 74,6 34,7Net profit 9,1 -33,3Employees 7 7


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10.10. BioEFEKTS LLC

General information

Contact details Address: Latvian Technological Center, 21 Aizkraukles str., Riga LV 1006 121 Bikernieku street, Riga LV 1079 Telephone: 7619157, 7619157, 7558728 E-mail: [email protected] Web-site: www.innovation.lv/bioefekts President (owner): Lielpētere Anita, Dr. biol.

Background "Bio EFFEKTS" was established in 1993. It manufactures biological products for agriculture for soil recovery, plant protection and ensuring healthy yields in Latvia. "Bio EFFEKTS" is cooperating in the scientific development field of action and elaboration of new approaches for improving quality of the Biological and Microbiological productions.

Core competencies and Technologies Research & Development - establishing of new soil cultures of micro

organisms, characterisation and accommodation for soil recovery, plant protection and ensuring healthy yields; development of new microbiological products’ varieties.

Manufacturing - improvement of the existing monitoring methods aimed at

increasing productivity (inorganic/organic basic chemicals, other chemical products, pesticides and other agro-chemical products)

Distribution - detailed information about obtaining environmentally friendly

and healthy food, as well as the availability and supply of preparations.

Cooperation - development of the scientific field of action and elaboration of new approaches for improving the quality of production.

Products Biological plant protection products (recover soil and ensure healthy yields):

trichodermin, Bio-preparations: BIO 1, BIO 2, BIO 3, BIO 4 and BIO 5 are designed for fighting against plant diseases (for neutral soil), Biomix, Verticillin and Trichogramma

Microbiological products: Nitragin, Azotobacterin, Biocomposter, Biological Manure for Hothouse and Room Flowers, Vitamin, Yeast of Wine


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Co-operation and sales links EFEKTS LTD. Liquid Compound Fertilizer Scientific and Technical Joint Venture University of Latvia, Laboratory of Plant Tissue Culture Collection University of Latvia, Laboratory of Microorganism Culture Collection Farm “Strēlnieki” growing of American cranberries

Financials Euro (thsd) 2002 2001 Net turnover 53,1 45,6 Production expenses of sold goods -50,6 -43,9 EBIT 2,5 1,7 Net profit 0,8 0,3 Empoyees Around 10


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10.11. BIOSAN LLC

General information

1. Contact details Address: Rātsupītes 1, Rīga, LV-1067 Telephone: +371-7426137 Fax: +371-7428101 E-mail: [email protected] Web-site: www.biosan.lv President (owner): Bankovskis Vasilijs

2. Background BioSan was founded in 1992 by a group of Genetic Engineering scientists of the Latvian Republic Microbiology institute. They are the leading developer and manufacturer of scientific and laboratory equipment in the field of sample preparation and analysis. BioSan invents and produces equipment and devices for laboratories, scientific investigations and experiments and in 9 years it has grown from a small family enterprise into a company, which exports to 35 countries. Every year BioSan develops around 10 new devices. The company received the "best innovative product in Latvia in 2000" reward.


R&D of laboratory equipment for the gene engineering and biotechnology Production of laboratory equipment for the gene engineering and

biotechnology

Products BIOSAN Ltd produces innovative laboratory instruments for sample preparation, which include the next generation of apparatus: Vigorous shaking

- Orbital & rocker shakers, shakers-incubators, programmable 3D shaker Rotation

- simple rotators & programmable rotators Mixing and stirring

- Magnetic stirrers ( 1-point, multi-point, with heating) Fast vortexing and centrifugation

- Personal vortex, minicentrifuge/vortex "Combispin" Heating and cooling

- Sample thermostating, thermostats-, water-, bath-, dry block heaters and coolers

Biosafety and biomolecules inactivation - UVC/T DNA cleaner box & UV air flow cleaner

tubes & flasks stands - Distillation device, lablift and metallic tube stands


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Co-operation and sales links Only 3-5% of all products stay in Latvia, the rest is exported. While currently products are exported to 35 countries – mostly to Europe, also USA, South America, Southeast Asia, there is a future plan to export to 55 countries.

Financials EUR (thsd.) 2002 2001Net turnover 588.4 559.1Production expenses of sold goods -407.4 -384.4EBIT 181.0 174.7Net profit -3.8 32.5Employees 35


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10.12. BIOTEHNISKAIS CENTRS JSC

General information

1. Contact details Address: Dzērbenes iela 27, Rīga, LV-1006 Telephone: +371 7553518 Fax: +371 7553518 E-mail: [email protected] Web-site: www.btc-automation.lv/en/ www.bioreactors.net President (owner): Dr. Vanags Juris

2. Background Biotehniskais Centrs was founded in 1996 and it is located in Teika scientific complex. Company is a good example in terms of commercialization of the innovation and scientific research. Initialization of this commercial company started in LU Institute of Microbiology, particularly under the guidance of Dr. Uldis Viesturs, the leading specialist in field of bioreactors and fermentation apparatus in CIS and Baltic region. Bioreactors encompass elements of industrial process automatization therefore research and construction in this field led to development of the new service in the company. Today industrial automatization is another activity field of Biotehniskais Centrs. On the first stage of its work the company was orientated on processes control in biotechnology and food production. The experience taken from those branches was successfully preceded in chemical industry. Recently successful activity was started in automation of environment protection (cleansing equipment) and public utilities (water and heating supply) processes control. The company development is progressing: it is mastering new technologies and enlarging the market segments by offering modernization services the new clients of different branches. Deloitte & Touche survey from the Eastern Europe innovation enterprises research has valued «Biotechnical Centre» as the 11th place according to the innovation progress in the Eastern Europe, and taking into consideration its fast development through out the Baltic countries.


• Research, design, production and service of bioreactors and controllers Design and production of bioreactors involve solutions for controlling microbiological environment by technical means. Environment parameters meant to be controlled are temperature (T), environment acidity (pH), partial pressure of dissolved oxygen (pO2), foam and agitation.

• Design and installation of automatization systems in different manufacturing and service branches


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The company does the process control projects in different fields by using the automation hardware and software products of different companies. They carry out the customer specialized automation projects, as well as proved solutions, and also develop and manufacture the bioreactors and other devices for biotechnology. The company uses modern process control technology in its work. The specialized controllers of Siemens Simatic, General Electric Fanuc, Wilke Technology, as well as Mitsubishi and Danfoss were mastered in the processes control applying. The process visualizing was based on Siemens WinCC and General Electric Complicity packages. Above all some specialized protocols were mastered such as LonWork, Profibus, Modbus, AS-I, etc.

Products Laboratory Bioreactor FAS-5.3 Bioprocess controller BIO-2 Programmable dosage pump and system Industrial and communal process automation in following industries:

- Food industry; - Biotechnology and pharmacy; - Chemical engineering; - Purification devices; - Public utilities (water and heating supply).

Co-operation and sales links Clients for automation projects are mainly large and medium size Latvian enterprises. The bioreactors and bioprocess controllers are ordered by foreign companies (Estonia, Lithuania, Germany, and Czech Republic). Biotechnical Centre is also involved in EC projects «Eureka» and «Craft».

Financials EUR thsd. 2001 2000Net turnover 678.4 361.2Production expenses of sold goods -639.9 -328.3EBIT 38.4 32.9Net profit 27.4 22.8Employees 8


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10.13. DELTA - RIGA LLC

General information

1. Contact details Address: Naukseni, "Darbnicas", Nauksenu pagasts, Valmieras rajons, LV-4244 Telephone: +371 4265300 President (owner): Mr. Visvaldis Skujiņš

2. Background “Delta – Riga” is the first factory of biological diesel in the Baltic States. The factory is completely automated with only one operator controlling the equipment, where the biological diesel is extracted from rape seeds. “Delta - Riga” manufactures methyl esters (RME) from oil of rape. The quality of RME corresponds to the norms of biological diesel in Europe and world.

Core competencies and Technologies Cold extraction of vegetable oil Vegetable oil conversion into biodiesel fuel

The process of manufacture is closed process of automated technologies. The process is environmentally friendly.

Products

• Bio diesel • Feed - stuff

The production capacity is currently 2500 t/per year of bio diesel. Biological diesel is obtained from agricultural products (corn, rape). Fuel can be used unmixed or in mixtures of various proportion with fossil fuels: bio ethanol (in petrol motors), bio diesel fuel (in diesel motors), and also energy resource of future perspective – biogas.

Cooperation and sales links In initial stage sales of bio diesel is planned to local petrol stations however in a future promotion through fuel wholesale companies. Apart from bio diesel, company intends to supply local farmers with feed stuff. In field of feed- stuff preparation scientific co-operation with SIGRA is carried out.


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10.14. DOCUMED LLC

General information

Contact details Address: 195 Brivibas Street, office 34, Riga, LV-1039, LATVIA Telephone: +371 7 54520 Fax: +371 7 545295 E-mail: [email protected] Web-site: www.documed.lv President (owner): Ms. Āboltiņa Indra

Background DOCUMED was established as the first Clinical Research Organisation covering all three Baltic countries - Estonia, Latvia, Lithuania, and Scandinavian countries. DOCUMED regional office of Baltic countries is located in Riga. The aim of the company is to operate multi-site, multi-therapeutic clinical research in an area with large population by administering a network of investigators and clinical sites and serving pharmaceutical companies needing clinical trials of investigational drugs or devices.

Core competencies and Technologies Extensive clinical investigator network Selection and set up of study sites Large untreated patient cohorts Development planning Trial design Project management Study monitoring in the Baltic countries Regulatory affairs management GCP - education Biostatistics and data management via alliances with Scandinavian office Medical writing via alliances with Scandinavian office

Company performed clinical trials in following medical areas:

Cardiovascular medicine (Congestive heart failure, Hypertension, Coronary heart disease)

Infectious diseases (Abdominal infections) Ophtalmology (Glaucoma) Pain (Nephrolithiasis, Cholelithiasis) Gynecology (Hormone replacement) Musculo-Skeletal (Rheumatoid arthritis) Pulmonary Medicine (Asthma)

Products & Services Supporting services of phase II, III and IV clinical trials


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Co-operation and sales links At the moment partner links exist with pharmaceutical companies Wyeth-Ayerst/Lederle, Pharmacia & Upjohn, Sanofi/Chinoin, Servier and Alcon Laboratories.

Financials Euro (thsd) 2001 2000Net turnover 185,0 173,3Production expenses of sold goods -90,9 -77,9EBIT 94,0 95,5Net profit -0,6 9,9

Human Resources The employees of DOCUMED Ltd regional office Baltics are employed or are contracted on project bases. Monitors are fully trained in GCP and in compliance with DOCUMED SOPs ensuring that data collected are of the highest standard. All monitors are physicians with a certificate of a higher specialisation. The monitors of DOCUMED Ltd regional office Baltics master all Baltic languages, as well, as English and Russian.


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10.15. ELMI LLC

General information

1. Contact details Address: 21/133 Aizkraukles Street, Riga, Latvia Telephone: (+371) 7558743, (+371) 9 240 126 Fax: (+371) 7 551 934 E-mail: [email protected] Web-site: www.elmi-tech.com President (owner): Mr. Ivan Mironov

2. Background The company was established in 1989 and it is located in Latvian Technology Center. Today ELMI is one of the leading lab equipment producer in Latvia. Company has ISO 9001 accreditation as well CE certification for the individual products.


R&D of laboratory equipment for the medicine and biology Production of laboratory equipment for the medicine and biology

Products The main product of the company is microprocessor controlled laboratory equipment for the medicine and biology and currently production distribution among equipment groups is following: centrifuges – 5% shakers - 20% water thermostats - 6% vortexes - 20% rotamixes - 49%.

ELMI considers entering in the market of ferments with its new product – computerized complex equipment GEL/MEMBRANE MINI PROCESSING WORKSTATION. According to company estimates, this complex allows considerable simplification of the work on gene decoding and the detection of characteristic features of genes. In the medicine, the system has a high potential in PCR reactions and ionoforesis reactions of proteins.

Co-operation and sales links Most of the production of the company is exported (96%). The main export markets are Italy, Sweden, Denmark, Germany, Switzerland, Austria, Spain – 60 %; Israel, Australia, New Zealand – 15%; South Korea, Japan, Hong Kong, Turkey – 20%. In the future ELMI considers expanding to the new markets in the USA, Canada

and Mexico. It has already received trial orders from companies in these markets The company purchases most of its inputs from the local suppliers


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The company is planning to work on the construction of devices described above and on ferment manufacturing together with the Institute of Experimental Pathology, the Center for Molecular Biology of Inflammation (ZMBE) Westfalian Wilhelms University in Germany, and the Institute of Microbiology and Virology in Latvia.

Human Resources The number of employees:

1998 1999 2000 F 2001 F 17 18 28 40

Four engineers are working on the R&D projects. All of them have higher technical education and research degrees in the field.


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10.16. FITOSAN LLC

General information

Contact details Address: Institūta iela 1, Sigulda, Riga District, LV-2150 Telephone: +371- 7976056 Fax: +371- 7976056 President: Ms. Maija Augule

Background Company FITOSAN successfully operates in field of development and production of new veterinary preparations basically using natural substances.

Core competencies and Technologies R&D of fito medicaments for veterinary; Production of medicaments for veterinary;

Products Currently company produces around 20 products for veterinary in following groups: Disinfection means Medicaments for ketozys, anaemia, rachitis treatment Therapeutics Vitamins and feed additives

Co-operation and sales links Company co-operate with research institute SIGRA in field of R&D of new products. All of the products are sold on the local market.

Financials EUR (thsd) 2000 2001 2002 Net turnover 46.9 51.3 251.6 Production expenses of sold goods -29.0 -25.8 EBIT 3.5 6.4 96.9 Net profit 0.6 4.4 Export % 0 0 0 Employees 5 5 5


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10.17. GENERA LLC

General information

Contact details Address: Ratsupites 1, Sigulda, Riga, LV-1067 Telephone: +371- 7425241 Fax: +371- 7442407 Director: Mr. Juris Steinbergs, Ph. Dr.

Background Company Genera was founded in 2001 as a commercial unit apart from University of Latvia Biomedical Research and Study Centre (BMC). The initial purpose for the company was to participate in the project “Genome Bank of Latvia”. Since this project was not enforced company pursues independent commercial activities in field of manipulations with genes. Today company has certified lab in field of clinic research.

Core competencies and Technologies Analyzation and manipulation of DNS (based on APLERA capillar analyzator); Trade of medical equipment;

Services Currently main services are: genotyping, determination of A and B hemophilia mutations, breast ovary risk assessment, 15 loci parenthood test, diagnostics of monogene and other disease, pharmagenomic researches

Co-operation and sales links Company has close co-operation with co-owner University of Latvia Biomedical Research and Study Centre (BMC) in field of research as well as in technical assistance. DNS manipulation services are meant to local customers, like clinics and labs as well as for foreign clients. For instance, company now do analization of sequenced genes for the department of Clinical Virology of Karolinska Institute (Sweden).

Human Resources For now company employs some 3 specialists.


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10.18. GRINDEKS PJSC

General information

1. Contact details Address: 53 Krustpils Street, Rīga, LV-1057, Latvia Telephone: +371 7139458 Fax: +371 7139513 E-mail: [email protected] Web-site: www.grindeks.lv Director: Mr. Valdis Jākobsons

2. Background Grindeks is a biggest pharmaceutical company in Latvia by turnover, local sales and export volume. Company can be considered as the leading company in the Baltic States in field of pharmaceutical production. Grindeks was established in 1991, yet its real history dates back as far as 1946 when the Experimental Vitamin Plant was established. In 1997 the privatization process of the company was concluded and Public Joint Stock Company Grindeks was founded. In 1998 quotation of Grindeks stocks started in Riga Stock Exchange. More than 6000 stock holders are owners of the company as a result of the privatization process. Optiva Bank (Estonia) owns the majority interest (64%) of Grindeks. In March, 1998 Grindeks purchased the majority interest (55%) of Tallinn Pharmaceutical Company. Grindeks in 2000 has received the current Good Manufacturing Practice certificate for the correspondence of the quality system and tablet and capsule production department to European demands. During the last five years, company has invested about EUR 5 million in company development, mainly towards the modernisation of the technologies and equipment.

Core competencies and Technologies The main fields of Grindeks competency are: R&D of dosage pharmaceutical products and active pharmaceutical ingredients

(API) Manufacture of dosage pharmaceutical products and active pharmaceutical

ingredients (API) Clinical and Bioequivalence studies Distribution of pharmaceutical products of other manufacturers Contract development and manufacturing of pharmaceuticals and active

pharmaceutical ingredients R&D of dosage pharmaceutical products and active pharmaceutical ingredients (API) involves:

1. For Active Pharmaceutical Ingredient


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a. Development of synthesis route b. Development of Drug Master Files (DMF) c. Pilot Plant. Improvement of Production Technology of Current API d. Pilot Plant. Supply of Small Batches (up to 5 kg) Manufactured

According to cGMP and Contract Synthesis

Involved reactions are: - Substitution. Esterification, acylation, alkylation, hydrolysis,

chlorination (with thionyl chloride, chloroanhydrides, etc.), silylation. - Elimination reactions. Dehydration. - Addition reactions. Condensation, catalytic hydrogenation (pressure up

to 40 atm.), bromination, hydration, hydrohalogenation, oxidation - Regrouping reactions.

2. For Final Dosage Forms

a. Preformulation studies b. Analytical development c. Scale-up and technology transfer d. Government submission

These capabilities exist in range of dosage forms – Tablets, Capsules, Oral solutions, Injections (including lyophilic products), IV solutions.

For manufacturing of dosage pharmaceutical products and active pharmaceutical ingredients (API) Grindeks cover following processes:

1. For Active Pharmaceutical Ingredient a. heating/ cooling (from - 40 to +250°C) b. autoclave processes (up to 40 atm) c. rectification d. extraction e. crystallization f. sedimentation/ filtration g. distillation in vacuum h. saturation with gases

2. For Final Dosage Forms a. production of powder mixtures, granulates (output 55 000 kg) b. production of tablets, including film coated (700 million tablets p.a.) c. production of hard gelatin capsules (output 150 million capsules p.a.) d. oral solutions: syrups, drops, suspensions (output 2 million bottles p.a.)

All of this production is followed by complete quality control testing that includes in-coming raw material testing, in-process testing, finished product release testing and stability studies.

In field of clinical services Grindeks handle Clinical and Bioequivalence studies of drugs. The trials are performed according to principles of GCP and GLP. The results of trials have been accepted by the Drug Regulating Authorities within the territory of former Soviet Union and Eastern Europe. Several clinical trials (Phase I - IV) including double blind, randomised, placebo controlled studies of Grindeks original products have been organised in Latvia and Russia. One of the studies was performed in collaboration with Japanese pharmaceutical company "Taiho".


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Products In total Grindeks manufactures 111 products: 62 tablet and capsule forms, 18 infusion solutions for hospitals, 14 active pharmaceutical ingredients, 11 injectables and 6 syrups. The drugs produced and marketed by GRINDEKS fall into six main therapeutical groups: cardiovascular drugs, anticancer agents, analgesic and antipyretic agents, psychotropics, gastro-intestinal drugs, vitamins.

Company’s API Business Unit carry out complicated, multi-stage synthesis of APIs. Production range of APIs is following: Active substances

- L-asparaginase; Benperidol; Cytarabine; Desaminooxytocin; Droperidol; Foridone; Ftorafur; Leacadine; Mildronate; Oxytocin; Phenindione; Quinifuryl diphosphate (quinifur); Thioguanine; Zopiclone.

Intermediate products - Acetoacetic acid isopropyl ester; Acetoacetic acid b -

methoxyethyleneglycol ester (2-Methoxyethyl acetoacetate); Acetoacetic acid methyl ester; Acetoacetic acid 2-propoxyethyl ester; 2-Acetoxyethoxymethylacetate; Acetylsalicylic acid chloroanhydride; 4-(2’-Aminoanilino) pyridinium dihydrochloride; 5-Amino-1H-1,2,4-triazolo-3-carboxylic acid; 2-Aziridinecarboxylic acid methyl ester; g -Chlorobutyric acid chloroanhydride ( 4-Chlorobutyryl chloride); 3-(5-Chloropyrid-2-yl)carbamoyl-pyrazine-2-carboxylic acid; 6-(5-Chloropyrid-2-yl)-5,7-dioxo-5,6-dihydropyrrolo[3,4b]pyrazine; 6-(5-Chloropyrid-2-yl)-5-hydroxy-7-oxo-5,6-dihydropyrrolo[3,4b]pyrazine; 6-(5-Chloropyrid-2-yl)-7-oxo-5-phenoxycarbonyloxy-5,6-dihydropyrrolo[3,4b]pyrazine; o-Difluoromethoxybenzaldehyde; 1,3-Dioxolane; Ethyleneglycol monopropyl ether; N-[(4-4’-Fluorophenyl)-4,4-ethylenedioxy butyl]-4-(2”-oxobenzimidazolinyl-1”)pyridinium bromide; N-[(4-4’-Fluorophenyl)-4,4-ethylenedioxy butyl]-4-(2-oxobenzimidazolinyl-1)-1,2,5,6-tetrahydropyridine; 4-(Fluorophenyl)-4-oxo-butyl chloride (4-Chloro-4’-fluorobutyrophenone); 2-Methylquinoline-4-carboxylic acid; Monochloroacetic acid chloroanhydride; 4-(2’-Nitroanilino) pyridine; 2-[2-(5-Nitrofuryl-2)ethenyl]-4-quinoline carboxylic acid; 1,2,4-Triazolo-3-carboxylic acid; 1,2,4-Triazolo-3-carboxylic acid methyl ester

Know-how substances - Acetylcysteine; Acyclovir; Angiotensinamid; Cerebrocrast;

Dihypraminum; Dioxonine; Encyclane; Lidocaine hydrochloride monohydrate; Nifuzolum; Nimotop; Nitrendipine; Pentagastrin; Ribavirin; Rifathyroin (TRH); Rigin; Taftsin


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Grindeks has a strong pharmaceutical development program, which allows rapid and effective preparation of a wide range of products. About 50 researchers are involved in development of new pharmaceuticals. In the last few years, 10 commercially viable technologies for APIs and almost 50 final dosage forms were successfully developed. GRINDEKS has its own originally designed products: “Mildronate”, “Ftorafur” and “Foridons”, which have been patented in several countries. “Ftorafur” and “Mildronate” have won world recognition for the Latvian pharmaceutical industry. The active substance of “Ftorafur” has been exported to Japan for 26 years, while “Mildronate” has occupied a stable place in the markets of Latvia and the CIS countries for the last ten years.

Co-operation and sales links In 2000 sales markets were following: Latvia 20%, Japan 17%, Europe 10%, CIS 19%, Russia 23%, Estonia 3%, Lithuania 8%. Sales structure were following: APIs 23%, Final Dosage Forms 47%, representation of other manufacturers 3% and Tallin Pharma company products 27%. A significant Grindeks co-operation partner is the Latvian Institute of Organic Synthesis. For several decades, Grindeks has been co-operating with the Institute in the fields of research and development of new drugs.

Financials EUR (millions) 2000 2001 2002 Net turnover 18.7 20.0 26.4Production expenses of sold goods 0.0 -12.8 -17.5EBIT 0.0 7.1 8.8Net profit 0.0 0.5 1.2Employees 480

Human Resources Fifty scientists and technologists are engaged in research and development of new products, in design and improvement of packaging and in the validation and supervision of the manufacturing processes. When needed, consultative support is received from the Institute of Organic Synthesis, the University of Latvia, the Riga Technical University, and also from invited experts from other countries. GRINDEKS employs skilled personnel having a high work ethic and considerable experience in manufacturing of sophisticated products. Of the total number of 480 employees, one-third have higher education: 31 physicians, 125 chemical scientists and engineers, 11 pharmacists, 35 biologists, and 19 mechanical and electrical engineers. The average age is 42 and the mean length of service is 9 years. The “Total Quality Management” principle envisages that every worker participates to ensure product quality. Every employee is offered on the average 5 training sessions (specialised seminars and lectures) annually, of the total 25 to 30 seminars


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and lectures. In addition, more than 40 managers and specialists have upgraded their education in other countries during the last two years.


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10.19. INTEGRIS LLC

General information

1. Contact details Address: 21 Aizkraukles Str. LV-1006, Riga Telephone: +371 7558738 Fax: + 371 7541218 E-mail: [email protected] Director: Mr. Juris Lauznis

2. Background Latvian company INTEGRIS Ltd. is founded in 2003 to concentrate efforts on new mobile system development. INTEGRIS is a spin-off of JSC AMERILAT R&D department and basic engineer staff, as well as management came from this department, having more than 10 year experience in medical equipment hardware and software design. Company is interesting of its capacity to develop solutions used in telemedicine and this is actually the most significant area of operation today.


software development for Windows CE based mobile devices, interfacing PDA’s to customers equipment, data acquisition and control system development including Basic and Java

microcontroller based devices, custom design of other integrated solutions.

Previous experience and competency obtained from AMERILATS is following: Most important projects, carried out by Research and Development Department in AMERILAT: 1996-1997 – Patient Monitor AL201, hardware and software; 1998 – Anesthesia Monitor AL202, project, hardware; 1994 – 1998 Prostate treatment systems, hardware and software; 1999 – Windows CE based ECG portable recorder, project, prototype and software; 2000-2001 - Windows CE based ECG portable recorder, software, commercial product “Cardio Perfect CE” (Pocket ECG) for Cardio Control NV; 2001 – up to now, Windows CE based ECG portable recorder system for telemedicine, software, for Cardio Control NV

Products

Mobile system development based on Pocket PC's Mobile phone application design using WAP and SMS services System integration


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Mobile measurement and control system design Consulting

Above mentioned product for telemedicine encompasses software for recording and analysis of electrocardiograms (ECG) using Pocket PC. It provides simultaneous recording of 12 leads and displaying up to 8 curves. It is possible to send ECG's to the hospital or evaluation center for analysis and receive confirmed interpretations using internet connection through mobile phone.

Human resources Company employs 4 specialists of whom 2 are senior researchers.

Sales and co-operation links Currently INTEGRIS is working together with Cardio Control NV, the Netherlands, on new mobile telemedicine ECG recorder project. In field of R&D company co-operate with Riga Technical University, particularly with Institute of Biomedicine Engineering Sciences and Microtechnology (BIMI) and Faculty of Computer Sciences. Company also collaborate with Society of medicine engineers.


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10.20. INVITROS LLC

General information

1. Contact details Address: Biķernieku 121, Rīga, LV-1021 Telephone: + 371 7840380 Fax: + 371 7840377 E-mail: [email protected] Web site: www.invitros.lv President (owner): Mr. Raitis Gadzjus

2. Background Company was founded in 1991 as a split from medical company AMERILAT. Today company can be considered as the most important player in field of wholesale and service of clinical and lab equipment. Company employs doctors and engineers thus encompassing good knowledge base for consultations and distribution as well as for installation, service, maintenance and repair functions in field of medical and lab equipment. Company seems to be one of the most significant players in field of installation, maintenance and repair of medical and lab equipment. Company is ISO 9000 certified.


• Wholesale of medical equipment and laboratory equipment and products for clinics

• Service, maintenance and repair of the equipment, training • Wholesale of medical goods and medicaments

Products Clinical laboratory equipment and reagents Glucometers Vacutainers

Company represents: ROCHE DIAGNOSTICS - provider of diagnostic systems and decision-oriented

health information BECTON DICKINSON – products for use in skin injection, sample collection,

infusion therapy, surgery, disposal DIAMED – all sorts of medical equipment, products, supplies ABX – re-usable packaging and logistics SEBIA – electrophoresis SANYO GALLENKAMP – lab equipment


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Co-operation and sales links Company serves Latvian medical market. It has established relationships with leading specialists in different medicine and engineering areas. Meantime close co-operation with universities is limited by now. Riga Technical University is considered as the most suitable co-operation partner in field of engineering.

Financials EUR thsd. 2001 end 2001 beginning 2002 Net turnover 2259.2 2087.4 3375.5 Production expenses of sold goods -1553.8 -1427.7 -2373.8 EBIT 705.4 659.7 1001.7 Net profit 73.7 84.5 90.9 Employees 26

Human Resources Company employs 26 specialists of whom 5 specialists are engineers and the majority of the rest are doctors. All employees have the highest education.


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10.21. KALCEKS JSC

General information

1. Contact details Address: 6/8 Zaļā Street, Rīga, LV-1010, Latvia Telephone: +371 7331228 Fax: +371 7338144 E-mail: [email protected] Web-site: www.kalceks.lv Director: Mr. Aleksandrs Zuments

2. Background KALCEKS was a state owned company, which has been privatised recently. It was established in 1932 with the name MEDFRO; in 1940 it merged with FARMAZAN, and in 1976 it was renamed “KALCEKS”. The specialisation of the company is the production of injectibles and their bottling in home-made glass ampoules. The production premises of KALCEKS are currently situated in the central part of Riga. Within the next 3-5 years a new facility will be built and the company production will be moved. The technological process has been developed in the company and the quality of finished products meets the requirements of pharmacopoeia and is accepted by the Latvian State Agency of Medicines.

Core competencies and Technologies Technological process includes: production of ampoules, production of WFI, preparation of injection solution according to pharmacopoeia, filling, sterilising, packaging.

The equipment used by the company includes ampoules washing machine by BOSCH, sterile aseptic filling line by ROTA and filtration equipment by MILLIPORE (USA) and PALL (Germany). The theoretical output – 68 million ampoules per year. Laboratory of KALCEKS is relatively modern and performs control of inputs and of the product at all stages of the technological process. Raw materials are purchased from producers and traders according to requested pharmacopoeian quality (usually they have ISO 9002 standards). Inputs are supplied mostly from the European countries: the Netherlands, Germany, Switzerland and Great Britain. Latvian inputs are also used. R&D department works on the development of new medicines in production, improvement of existing technological process, stability testing.


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KALCEKS specialises in the production of injectibles filled in glass ampoules. 1; 2; 5; 10 ml ampoules are also made in KALCEKS from glass tubes. The range of products has reached 47 different injectibles. In the development of new pharmceuticals KALCEKS collaborates with the physicians and pharmacists of Latvia. At present there are three injectible filling lines in the enterprise, one of them is maximally adapted to operate in full compliance with GMP where the whole production process is carried out in sterile (aseptic) conditions.

Products KALCEKS produces approximately 50 various injection solutions representing such therapeutic groups as: vitamins; analgesics; narcotic analgesics; histamin antagonists; local anaesthetics; diuretics; cholinesterase - inhibiting drugs; tranquilizers; nootropic agents; antiseptics; psyhostimulants; non-steroidal anti-inflamatory drugs; cardiovascular drugs; broncholytic drugs; preparation of calcium and magnesium; antidots.

The company works only with generic products. The end users of KALCEKS products are both medical institutions and individuals. However, all the products offered by the company are sold only against producing doctors prescriptions.

Co-operation and sales links Products are mainly sold through wholesalers with well-established network in Latvia and abroad. The local market accounts for 30% of the total sales and KALCEKS is the biggest producer of injectibles in Latvia. The most important export markets are Russia, the Ukraine, Lithuania, Belarus and Azerbaijan. In 1998 70% of production was exported.

Financials In 2002 KALCEKS sold production in the amount of EUR 0.53 million in Latvia (7th place from top sellers), while outside Latvia – EUR 0.92 million taking the 4th place.

EUR (thsd.) 2001 2000Net turnover 1282.3 905.4Production expenses of sold goods -1212.1 -965.2EBIT 70.1 -59.7Net profit 9.6 -9.4


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Human Resources KALCEKS employs 52 skilled specialists with a degree in engineering. Employees have regular training programs and special courses on “Good Manufacturing Practice”. The key staff members have regular training abroad and training at seminars held by guest lecturers from Germany, Finland etc. organised by Latvian State Pharmaceutical Inspection. The turnover of the labour force is low.


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10.22. LARIFANS LLC

General information

1. Contact details Address: Rātsupītes iela 1, Rīga, LV-1067, Latvia Telephone: +371 2 427462 Fax: +371 2 428036 E-mail: [email protected] President: Ms. Guna Feldmane

2. Background LARIFĀNS has been founded by the Institute of Microbiology and Virology, a private company and an individual person, who has managed the process of creating “Lariphan” in the Institute from the very beginning, and currently is the director of the company. Up to this time the total investments have exceeded EUR 60,000. Scientific projects of the company deal with investigation of the possibilities to enlarge the spectrum of “Lariphan” application (including oncology and immunology), as well as elaborating new drug forms. Company envisages developing co-operation with large-scale drug distributing companies which have branches in different countries. Company pursues activities in order to introduce GMP standards.

Core competencies and Technologies elaborating of new drugs and drug forms, production of pharmaceutical finished forms

The active substance – double-stranded RNA (dsRNA) is produced biotechnologically. 1-st stage – obtaining the biomass of bacteriophage infected bacteria by fermentation, 2-nd stage – chemical isolation of ds RNA from biomass, 3-rd stage – preparation of the drug form – “Lariphan” ointment. The plant possesses: laminar flow units, fermentators (ELECTROLUX, Sweden), centrifuges (JANCTOKY “K-70”, Germany), refrigerators (Germany), incubators, electronic balances (Germany) ointment mixing device (RN-20), tube filling device (MAME – P/E, the Czech Republic), tablet packing equipment, spectrophotometers, colorimeters etc.

In 1997 40,000 tubes of ointment were produced. It is planned to increase the range of production up to 200,000 tubes per year. Company plans to modernise testing


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methods of end- and semi-products. Quality control system according to GMP is being introduced. Raw materials are obtained from different sources, e.g., spirit from Latvia, large bulks of plain chemicals from Russia, Poland and fine chemicals from Germany, Great Britain and the USA.

Products The medical preparation “Lariphan” is an antiviral drug of natural origin, which

possesses also antitumoral and immunomodulating activities. “Lariphan” is an inductor of endogenous interferon and by this reason the spectrum of its antiviral activity in comparison with that of chemically synthesised preparations is very wide. “Lariphan” exposes an antimutation activity as well. The product has been patented in the Republic of Latvia under No. 10653.

“Lariphan” ointment has been successfully used for combating viral infections caused by herpes, papilloma and respiratory viruses. “Lariphan” has certain advantages to interferons, namely, a wide use of interferons is limited by their high costs and interferons, as protein products, cause more side effects.

“Lariphan” 0.05% ointment has been registered with State Drug register and it is being produced and distributed through large-scale drug distributors in Latvia. The trademark of the product has been submitted for registration in Latvia.

LABORATORY OF BIOLOGICALLY ACTIVE SUBSTANCES and LABORATORY OF CELLULAR BIOTECHNOLOGY & VIRUS INFECTION have developed several preparations for human and animal health care: „APB-Vet” is an animal food supplement for treatment & prophylactics, consisting

of viable Lactobacillus acidophylus in the frozen state. It stimulates the normalisation of intestinal microflora, helps in cases of diarrhea or constipation, is recommended for use after dehelminthisation, and improves the metabolism and appetite.

APB-Vet is registered in the Latvian Register of Veterinarian Drugs and can be obtained without prescriptions.

„Labdaris” is an analogous preparation (in the non-frozen state), registered in the Latvian Food Center as a food supplement for humans.

„Glikomuns” and its derivatives are also registered in the Latvian Food Center as food supplements. They contain a mixture of natural glycooligopeptides from Lactic acid bacteria’s cell walls. They possess immunostimulating and cell protective properties.

The synthetic equivalents of Glikomuns are: MDP (N-acetylmuramyl-L-alanyl-D-isoglutamine) and GMDP (N-acetylglucosaminyl-N-acetylmuramyl-L-alanyl-D-isoglutamine), which are used as drugs.

„Glikomuns” is recommended to enhance the self-protection of the human organism, particularly in cases of influenza, viral encephalitis, hepatitis C.

Co-operation and sales links

Larifans had co-operation with company BIOTECHNICAL CENTER in field of automation of fermentation control. Company also co-operate with several leading specialists in field of new medical applications.


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Financials At the moment turnover of the company does not exceed EUR 100 thousands.

Human Resources The company employs 20 people, 3 of them in administration. 80% of employees have higher education, among them – microbiologists, biotechnologists, chemists, pharmacists, two Dr. med., one Dr. biol. and one Ph.D.


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10.23. LEMIS BALTIC LLC

General information

1. Contact details Address: 26 Ganibu dambis Str. Riga, LV-1005 LATVIA Telephone: +371 7383223 Fax: +371 7383270 E-mail: [email protected] Web-site: http://www.lemis-baltic.lv/public/ President (owner): Ms. Johanna Simanavichus

2. Background Lemis Baltic was founded in 1988, ever since then they are involved in developing laboratory instrumentation. In 1992 Lemis Baltic started the development of first portable density meter D-921 – for taking measurements in the tanks without sampling. It was decided to use the floating principle as the basis of the device. In 1994 the D-921 was certified and its commercial production has begun. Since March 2002 Lemis Baltic is ISO 9001: 2000 certified by Det Norske Veritas. Due to the international market requirements all products are CE marked and portable instruments have CENELEC certificate EEx ib[ia] llB T4, VTT No. Ex-02.E.027X, so they may be used in highly explosive atmospheres. Company encompasses good potential for new product development in field of electronic and mechanical apparatus as well as in process automatization. Now closest products for biopharma industry are analyzers for beverage producers as well as density meters in some extent. However there is a capacity for development of equipment for various biopharma areas.


R&D of new electronic and electromechanical devices in various areas Manufacture electronic and electromechanical devices Automatization of manufacturing and technical processes Sales and service

Products Density & Concentration Meters:

- Portable - Laboratory - Laboratory for LPG - Process

Alcohol Meters: - Beer Analyzers - Wine Analyzers

Refractometers: - Digital


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- Hand Held Viscometers:

- Laboratory - Process

Co-operation and sales links Distribution of LEMIS BALTIC sales is following: Latvia (5%), CIS and Russia (80%) and the rest of the world (15%).

Financials EUR 2001 2000 Net turnover 311545.0 69920.0 Production expenses of sold goods -177580.0 -40196.7 EBIT 133965.0 29723.3 Net profit 3561.7 35.0 Employees 15

Human Resources R&D stuff consists of 14 specialists of whom 5 are electromechanical engineers, 4 mechanical engineers, 3 programmers and 2 lab specialists.


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10.24. MEDEKSPERTS LLC

General information

1. Contact details Address: 9-9 Pulkveza Brieza Str. LV-1010 Riga Telephone: +371 750 86 12 Fax: + 371 750 86 13 E-mail: [email protected] President (owner): Spriņģis Ivars

2. Background Medeksperts company is one of the leading suppliers to Latvian medical institutions and clinics. Company operates in the market for some 10 years and represents range of foreign medical equipment & goods and medicaments.


• Wholesale of medical equipment and apparatus for clinics (reanimation, operating – rooms) and general practitioners

• Service and training for the equipment • Wholesale of medical goods and medicaments

Products Medeksperts represents range of foreign suppliers, the most important of whom are TYCO, SCISCAN, DAMECA, ARGUS, DATASCOPE, NOUVAG, WEBECO, MEDEX, DAHLHAUSEN, ACUTRONIC, BHT. Representation of local suppliers is insignificant.

Financials EUR (Thsd.) 2001 2000 Net turnover 614.72 575.39 Production expenses of sold goods -536.69 -517.02 EBIT 78.03 58.37 Net profit 13.54 14.49 Employees 10 10


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10.25. MEDPRO INC. LLC

General information

Contact details Address: 17 Gertrudes iela, Riga, LV-1746, Latvia Telephone: +371-7-270124, +371-7-277783 Fax: +371-7-272602 Director: Mr. Vairis Buļs

Background MedPro, one of the leading pharmaceutical producers in Latvia has been successfully operating since 1992. There are about 20 products known to the Latvian market. In 2002 MedPro was 3rd largest producer of pharmaceuticals. MedPro was also the 3rd largest exporter of pharmaceuticals in 2002. In 1996 MedPro Inc. signed a contract with Latvian Privatisation Agency on purchasing the state pharmaceutical company FARMSINTĒZE. The main activity of the company is production – synthesis of active pharmaceuticals ingredients (AphI). After privatisation, the business line of the company was completely retained. The former management personnel of FARMSINTĒZE are current managers and owners of the controlling share in MedPro Inc. Company have two production control laboratories and separate laboratory for scientific research. Today company is going to receive GMP certificate for packaging department.


Development of pharmaceutical, processes, technologies Manufacture of active substances and finished forms Wholesale and retail of pharmaceuticals

Products Main product groups of MedPro are: Analgesic Hemostatic Hypnotic Anticoagulant Expectorant Sugar substitute Disinfectant Ca, Mg, Zn Products made from soil’s fat Vitamins

The products are tested according to international pharmacopoeias: British (BP93), USA (USP XXIII), German (DAB10) and European (PhEur 2;3).


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Co-operation and sales links Company’s export structure is following: - to Western and Central Europe (Germany, the Czech Republic, Switzerland, Slovenia, also Great Britain and Finland) – 38%; - to Asia (India) – 30%; - to CIS (Ukraine, Russia) – 20%; - to Australia – 3%;

Financials Euro (thsd) 1996 1997 1998 2001 2002 Net turnover 1536.0 1903.0 1920.0 2350.0 2633.3 Export volume 957.0 1236.0 1400.0 1566.7 1833.3 Net profit 14.0 20.0 31.0

Human Resources 150 employees.


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10.26. OLAINFARM JSC

General information

Contact details Address: 5 Rupnicu Street, Olaine, LV-2114, Latvia Telephone: +371-7013700 Fax: +371-7013777 E-mail: [email protected] Web-site: www.olainfarm.lv Chairman: Mr. Maligins Valērijs

Background Olainfarm is the second largest chemical-pharmaceutical manufacturer in Latvia in terms of total turnover, local sales and export volume. Company develop, manufacture, market and distribute a broad range of pharmaceutical products. Established in 1972 as a large-scale generic pharmaceutical manufacturer, within the former Soviet Union it was the sole supplier of more than twenty-five key ingredients for the Soviet region. In 1976 the plant became a leading branch of the manufacturing corporation LATBIOFARM which also included the plants FARMĀCIJA and KALCEKS. In April 1997, resulting from privatisation, OLAINES ĶĪMISKI FARMACEITISKĀ RŪPNĪCA (Olaine Chemical-Pharmaceutical Plant, OLAINFARM) was transformed into a joint stock company. Today, Olainfarm employs over 600 professionals, makes more than 70 finished forms and active pharmaceutical ingredients, as well as a number of intermediates and speciality chemicals. Company has ISO 14001: 1996 certificate and now it is going to receive GMP standard. Shares of the company are traded on Riga Stock Exchange second list. Owner of the controlling share package is company Olmafarm LLC (Latvia). OLAINFARM is a co-owner or owner of Endokriniai Preparatai JSC (30.89%; Lithuania), Olainfarm USA (51%; USA), Olfaneks (100%; Latvia), BAB Selga LLC (75%; Latvia), Stimfarm (51%; Latvia), Aroma BaltFarm (100%; Estonia), OLFA (51%; Ukraine), Baltfarm LLC (51%; Russia), Aroma – Peterburg JSC (51% Russia), Kameja MC LLC (65%; Latvia).


Olainfarm offers full-service, on-site manufacturing capabilities: product development services, raw material acquisition and handling, inventory control, ingredient processing and formulation, drug substance and pharmaceutical product manufacturing, packaging, quality control and shipping.


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The following chemical reactions are performed at the chemical shops of Olainfarm: - Nitration - Hydrogenation (6Mpa) - Reductive Amination - Leuckart Formylation - Dieckmann Condensation - Ullmann Condensation - Methylation with Dimethyl Sulphate - Bromination - Friedel-Krafts Alkylation - Traube Condensation - Catalytic Hydrogenation of Nitrogroup - Diazotization - Oxidation - Wurtz Condensation - Grignard Reaction - Claisen Condensation - Chlorination with Thionyl Chloride and Phosphoryl Chloride Today Olainfarm manufactures more then 50 different chemical intermediates and functional chemicals. Specialties of the company, such as Adamantane, Furan and Quinuclidine derivatives are well established in pharmaceutical and other challenging applications. Fine organic synthesis of active ingredients is the priority direction of the company. The highly professional skills of Olainfarm specialists and complex manufacturing equipment facilitate implementation of multi-stage processes in synthesis. Over the years the company has also accumulated valuable experience in working with highly hazardous chemicals, such as sodium and lithium metals, hydrazine hydrate, dimethyl sulfate, nitric and sulfuric acids, oleum, diethyl ether, thionyl chloride and others. Quality Assurance/Quality Control Department ensures that the systems and procedures are followed through inspections and reviews. It co-ordinates the activities of different departments, conducts internal audits and training programmes. It assures the quality of the product dispatched from the manufacturing site. A well-equipped Laboratory, by using the latest analytical procedures such as IR and UV spectroscopy, HPLC/ TLC and GC for microscopic particle testing and measurement, is being charged with the following responsibilities: Performing chemical and microbiological testing of raw materials, intermediates,

active ingredients, packaging material, and finished products, as well as stability testing;

Auditing manufacturing, as well as reviewing and releasing batch records; Monitoring facilities, utilities, processes, environmental quality, and services; Maintaining and distributing critical documentation, including SOPs, validation

documentation, and specifications; Providing regulatory support for the process development through commercial

manufacturing.


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Products The products of the company fall into the following three categories: Finished forms - from self-synthesised and purchased substances; Biologically active substances; Chemical intermediates

According to their pharmaceutical qualities, the medications represent the following groups: Drugs that influence the central and peripheral nervous system, Heart, Circulatory system, Diuretics, Antispasmodics, Remedies against parasites and microbes, etc.

Each year company develops about 25 new products.

Co-operation and sales links Finished forms production is mainly exported to Russia and other CIS countries, as well as to the Baltic States. Substances and intermediates are exported to CIS countries and the rest of the world in less extent. Company co-operate with the Institute of Organic Synthesis of Latvia and with a number of research institutes in Russia in field of R&D.

Financials Euro (thsd) 1999 2000 2001 Net turnover 8666.3 11068.0 12621.6 Production expenses of sold goods -3175,7 EBIT 9445,9 Net profit 53.4 300.2 392,6 Export content, % 76 Employees 660 694 741

Human Resources 24% of the employees have higher education, 41% have professional education, 25% have high school education.


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10.27. RĪGAS FARMACEITISKĀ FABRIKA JSC

General information

Contact details Address: Duntes iela 16/22, Rīga, LV-1005, Latvia Telephone: +371-7355550 Fax: +371-7391790 E-mail: [email protected] Web-site: www.rff.lv General Director: Mr. Kaspars Bāliņš

Background RĪGAS FARMACEITISKĀ FABRIKA is the leader in production of herbal pharmaceutical preparations in Latvia. The company has started its operation in 1950 as a medicine-packaging unit. The status of a pharmaceutical factory was obtained in 1959. In November 1997 the state company was privatised and transformed into a joint-stock company RĪGAS FARMACEITISKĀ FABRIKA The privatisation of the company facilitated its development and reconstruction in accordance with “Good Manufacturing Practice” (GMP). The strategic directions of the company in product development are to introduce the production of new galenical preparations, ointments and compound herbal teas.

Core competencies and Technologies R&D and production of herbal preparations and finished forms

- company do not use synthesis technologies for preparation of finished forms

Packaging and wholesale of pharmaceutical preparations

Products Product range of Rigas Farmaceitiska Fabrika is following: Tinctures, Drops, Extracts, Syrups, Solutions of medicine in alcohol or oil, Pastes, Ointments, Liniments, Herbal teas.

Co-operation and sales links Export to Estonia, Lithuania, Georgia and Azerbaijan (10% of the output).


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Financials Euro (thsd) 1998 1999 2000 2001 2002Net turnover 1706,2 1412,0 1737,5 2231,9 1706,2Production expenses of sold goods 0,0 0,0 0,0 -1167,3 0,0EBIT 0,0 0,0 0,0 1064,6 0,0Net profit 69,7 2,3 91,8 269,9 69,7Export content 10% 10% 10% 10% 10%

Human Resources Company’s staff is 75 employees, of them 20 specialists with higher education, 68 specialists with secondary or specialised secondary education. Two doctors of science in biology.


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11. Annex 2. Profiles of leading researchers

11.1. Latvian University A. Kirhenšteins Microbiology and Virology institute

Latvian University A. Kirhenšteins Microbiology and Virology Institute was created in 1993, after reorganisation of Augusts Kirhenšteins Microbiology institute. Latvian University A. Kirhenšteins Microbiology and Virology institute is an enterprise of scientific research in the fields of microbiology, virology, biotechnology and bioengineering. Institute and its ascendant laboratories have carried out investigations in various microbiology, virology, immunology, as well as biotechnology areas, for example, biological processing of agricultural products, soil microbiology and regulation of microbiological processes, investigation of stimulators for plant growth, biosynthesis of amino acids in cells of microbes. There has been investigation of viral cancer genesis, mechanisms of immuno-modulation, oncogenous viruses of birds and combating their evoked diseases, antiviral preparations for the treatment of respiratory diseases. Main scientific directions: Use of micro organisms in the protection of environment and degradation of

pollution Research and investigation of phyto-regulators Immunology of viral infections Onco-virology Cell biology Investigation of immune-modulators Cell biotechnology and viral indications Development of veterinary preparations

Some of the projects: Molecular and epidemiological research of multi-resistance and genetic

modification of infection agents Biomedical and social aspects of aging of population Structure and functions of double-spiral ribonucleic acid of cell origin Cloning of Nicotiana tabacum var. SR1 citocinine biosynthesis, its regulations

and/or citocinine signal carry genes


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11.2. Latvian Institute Of Organic Synthesis

General information

1. Contact details Address: 21 Aizkraukles Street, Rīga, LV-1006, Latvia Telephone: +371 7551822 Fax: +371 7550338 E-mail: <[email protected]> Web-site: www.osi.lv Director: Prof. Dr.habil.chem. Edmunds Lukevics

2. Background The Latvian Institute of Organic Synthesis was founded in 1957 as Institute of

Organic Synthesis of Latvian Academy of Sciences, comprising three laboratories previously belonging to three different Institutes of the Latvian Academy of Sciences and connected with the invention of new pharmaceuticals.

The Institute has been founded as a complex scientific research establishment uniting researchers in synthetic organic chemistry, experts in physical chemistry, molecular pharmacology, biologists, medical experts as well as physicists, technologists, and specialists in modelling, in order jointly to design and synthesize new biologically active substances, and to perform their chemical, biological and medicinal studies for creation of new pharmaceutically active ingredients. A pilot plant was also included within the structure of the Institute that ensured working out the technologies for the required substances and the production of preparations. Since 1992 the pilot plant turned into an independent state company "Grindex", which was recently privatized. The Department of Molecular Biology of the Institute has also become an independent structure, namely University of Latvia Biomedical Research and Study Center (LU BMC).

Since 1965 the Institute publishes a monthly journal “Химия гетероциклических соединений” (Chemistry of Heterocyclic Compounds) which is regularly translated and published in English in the USA.

Core competencies and Technologies The main fields of IOS competency are: • synthesis of biologically active organic compounds, heterocycles, organometallics, amino acids and peptides, • synthesis of new biorganics by asymmetric synthesis and investigation of reaction mechanisms, • development of microwaves application in organic synthesis, • development of preparative methods for the synthesis of complicated molecules, • intelligent design of pharmacophore model for ligand-receptor interaction, • physical organic chemistry, • quality assurance and analysis of biological active substances, • pharmacology, biochemistry and cell biology, • screening of cardiovascular, CNS, active anticancer and antibacterial compounds,


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design and target-oriented synthesis of new compounds for: • treatment of cardiovascular and CNS diseases, • creation of new anti-tumor agents and antibacterial drugs, • screening on receptors, cell lines and animals, • scale up and preparing samples in kg amounts, • investigation of pharmaco-kinetics, pharmaco-dynamics and bioavaibility, • determination of metabolic pathways, • design and monitoring of clinical trials.

Products More than 60 medicines and pesticides have been created by the Institute during the last 4 decades, including 17 original preparations: Antibacterial agents: Furagin, Furagin soluble Anticholinesterase agent: Quinotilin Anticoagulant: Omephin Antischaemic agent: Mildronate Antiepileptic agent: Methindione Antineoplastic agents: Imiphos, Ftorafur Antiparkinson agent: Gludantane Antihypertensive agent: Foridone Immunomodulator: Leakadine Radioprotective agent: Diethone Muscle relaxant: Dioxonium and others.

Co-operation and sales links IOS is actively developing contract research for SME of Latvia, EU, Japan, USA and other developed countries. The main partners of IOS are start up companies, supported by venture capital, but long term co-operation is established also with medium sized and large pharmaceutical companies. IOS is licensing also their own developed and patented medicines in field of CNS, cardio-vascular and anticancer drugs. A significant IOS co-operation partner in the fields of research and development of new drugs. is the Latvian company “Grindex” , which has licensed in many of IOS inventions. IOS is actively collaborating with Western pharmaceutical companies as R&D contract research organization realizing: • custom synthesis • development of preparative methods of synthesis • structure optimization of leading compounds and screening • common research projects containing creation of new approaches for:

drug design, synthesis of targeted compounds, screening and QSAR,


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chemometrics, pharmacological testing of activity, investigation of biochemical mechanism of action, metabolism, bioavailability and parmacokinetics, development of synthesis procedures and scale up, design and monitoring of clinical trials

•During the last 3 years 2 new products were licensed for Grindex, 2 products for clinical trials where developed for the German company, one product developed for UK company and additionally to them 12 new patents applied for other promising classes of new molecules.

Financials

EUR (millions) 2000 2001 2002 2003Net turnover 1,451 1,789 1,888 2,306Net profit non profit organizationEmployees 305 313 315 321 (110 Ph.D.)

Human Resources The Institute is the main scientific center of Latvia in organic and medicinal chemistry. IOS is participating in highest level of educational system of Latvia by the supporting doctoral students of Riga Technical University, University of Latvia and P.Stradina University with scientific supervision, instruments and equipment. 110 Ph.D with co-workers are engaged in basic research as well as in research and development of new products. Over 60 undergraduate students are involved into scientific projects, leaded by scientists of IOS. Laboratory for Quality Assurance and Quality Management ensures the product quality. Laboratories

• Chemistry of Carbofunctional Compounds • Chemistry of CNS Active Compounds • Membrane ActiveCompounds • Organic Chemistry • Organometallic Chemistry • Peptide ChemistryPerspective Technologies in Organic Synthesis • Pharmaceutical Pharmacology • Chromatography • Physical Organic Chemistry • Quality Assurance

Groups • Anticancer Antibiotics • Biochemistry • Catalytic Synthesis • Chemistry of Nucleic Acids Components


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• Electro optic Materials • Experimental Chemotherapy • Molecular Biophysics • Synthesis of Biologically Active Compounds • IDR


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11.3. Institute of Biology Main directions of scientific research Investigation of natural resources of Latvia, their rationale use, environmental and

ecological problems, nature protection. The direction includes the following scientific fields: Entomology, Soil zoology, Taxonomy of vascular plants, Flora of Latvia, Bryology, Mycology, Algology, Hydrobiology, Hydrochemistry, Ornithology;

Life processes and biological productivity of plants and animals. The direction includes the following scientific fields: Plant genetics, Plant physiology, Biochemistry of hormones, Animal nutrition physiology, Soil chemistry and Plant mineral nutrition, Human psychophysiology.

Laboratories of the Institute of Biology Laboratory of Bio indication Laboratory of Biochemistry and Physiology of Animals Laboratory of Biochemistry of Hydrobionts Laboratory of Botany Laboratory of Experimental Entomology Laboratory of Hydrobiology Laboratory of Ornithology Laboratory of Plant Genetics Laboratory of Plant Mineral Nutrition Laboratory of Plant Physiology Psycho physiological Research Group Latvian Bird Ringing Centre


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11.4. Institute of Microbiology and Biotechnology University of Latvia Institute of Microbiology and Biotechnology is legally independent institute in collaboration with Faculty of Biology. The Institute of Microbiology and Biotechnology (MBI) was founded as a structural unit of the University of Latvia in 1993 on the basis of the former August Kirchenstein Institute of Microbiology at the Academy of Sciences of Latvia. Besides research projects, the institute is aimed at the organization of a training programs in microbiology and biotechnology at the Faculty of Biology, Faculty of Chemistry of University of Latvia, Faculty of Food Technology, Latvian Agricultural University. Main Directions of Investigations Genetics, physiology, cytology, biochemistry, bioenergetics of micro organism; Biotechnology of microbial biosynthesis and conversion of renewables,

bioengineering; Microbiological processes and preparations in agro-food sector, protection of the

environment. physiology and genetics of producers of organic substances; metabolism regulation and bioenergetics of producers of organic substances; (amino acids, enzymes, storage polymers etc.); micro organism cytology and metabolism under extreme environment; conditions (The LU MBI researchers have a wide collaboration program with

foreign specialists, as well as with Latvian Council of Science and enterprises mainly in Latvia.

ksero- and osmotolerance), especially anabiosis of cells; bioconversion and bio refinery of agricultural raw materials; food and bio fuel biotechnology; environmental microbiology and biotechnology; hydrodynamic parameters of bioreactors, modelling and optimization; Development of algorithms of process automatic control.

Key Research Problems The immobilization of living cells of ethanol and levan producing Zymomonas

mobilis and influence of medium osmolarity on cell physiology are developed. Energetic metabolism of this culture is investigated in details. Ethanol, levan and fructooligosaccharides production technologies are developed using industrial substrates. Levan modification for medicine is investigated as well.

An important direction of work is the investigation of biopolymer production (producers and technologies of levan and polyhydroxybutyrate biosynthesis). There are very wide possibilities for application of these substances. Poly-hydroxy-butyrate also attracts interest as biodegradable polymeric material for packing, capsulation of plant seeds, etc.

New products for food industry are developed. Lactic acid bacteria and several selected yeasts are investigated for their perspective use in the food industry. Polyfunctional food product using probiotic bacteria and oat based media is developed. Product is produced and called "Auzu bio-Lacto".

Environmental problems are an area of intensive research at the institute. Researchers have selected individual microorganisms for heavy metal biosorption and biodegradation of toxic compounds, as well as created microorganism


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associations for waste water treatment. Technological constructions for aerobic and anaerobic processes, for biogas production also have been developed. New methods are being generated for genotoxic contamination analysis, using biological test systems. Methods for biofuel - ethanol, biodiesel and biogas production in semi closed bio systems are evaluated and concepts for National bio fuel program are developed. The investigations of biosynthesis of L-lysine are continued.

Bioengineering investigations have completed in research collaboration with the Latvia State Institute of Wood Chemistry and SME "BC". The main directions of those investigations are mixing phenomena in reactors, measurement and control of stirring intensity, specific mixers for stress-sensitive cultures and high viscosity mediums, as well as the influence of mixing on cultivated culture development and physiological processes.


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11.5. Research Centre "Sigra" Founded on February 21, 1946 in the system of Latvia Academy of Sciences as the Institute of Zootechny and Zoohygiene. In the year 1956 Institute was included in the system of the Ministry of Agriculture. From the year 1963 located at the Sigulda. From the 1st of January, 1998 integrated with LUA. Research Centre “Sigra” includes three Scientific Departments and Biochemical Laboratory accredited by Latvia National Bureau of Accreditation. The main directions of the investigations are: The theoretical development of domestic animals genetic potential improvement

and an investigation of the practical application possibilities by using different breeds and methods;

Improvement of the dairy cows breeds genetic potential, the elaboration of selection conditions for healthy and economically profitable breeds;

Investigation of beef cattle breeds; Elaboration of fodder preparation, preservation and feeding-value increasing

methods based on the scientific investigations; The ecological status investigations in the area of animal production, measures

elaboration and approbation for high value products obtaining; The new methods elaboration for the infectious and non-infectious diseases

prophylaxis and treatment, development, investigation and approbation of effective medicines for treatment;

Carries out trainer training work at the faculties of Latvia University of Agriculture, organizes farmers and advisers training, organizes workshops, conferences, etc.

Departments Department of Animal Science

Carries out research activities and concludes the contracts on the scientific elaborations, advises in following issues of the animal husbandry: all domestic animals breeds selection, breeding, keeping, reproduction etc.; dairy farming; cow’s organism physiology during milking; assurance of milk quality; meat production; pig farming; poultry farming.

Department of Feed Technology and Animal Nutrition Carries out research activities and concludes the contracts on the scientific elaborations, advises in feed-stuffs preparing and animals’ feeding; wet grains conservation and feeding technologies; improvement of combined feed composition; the new progressive fodder crops approbation and extension in the domestic animals feeding.

Department of Veterinary Medicine Carries out research activities and concludes the contracts on the scientific elaborations, advises in following issues of veterinary medicine: animals’ infectious and non-infectious diseases, incl. diseases of reproductive system and udder diseases, metabolism and new born animals diseases; veterinary genetics; disease treatment, serums, vaccines, medicines development and production, veterinary pharmacy; diseased animals rearing.

Biochemical Laboratory


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Provides all research activities of RC “Sigra” with necessary clinical analyses, makes clinical analyses according to orders of the customers: chemical composition of concentrated feed, grass forage, root-crops; chemical analyses of blood, milk, meat and others’ substratum, incl. residues of heavy metals and others’ elements; advises and makes analyses for producing ecologically safe products and development of organic farming.


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11.6. Biomedical Research and Study Centre University of Latvia Biomedical Research and Study Centre (BMC) was established in 1993 on the basis of the former Institute of Molecular Biology, Latvian Academy of Science and University of Latvia (LU). In October 1990 the Institute of Molecular Biology, the predecessor to the present UL BMC, was established on the basis of this Department. Main areas of research: Research on biomedicine Molecular biology and genetics Biotechnology recombinants

Research and Projects More specific research projects: Structural and functional organisation of transcription factors regulating the genes

of human immune system; Determination and mathematical modelling of spatial structure of proteins, studies

of antigenic determinants and their binding with antibodies; Structures of chimeric capsids formed on the basis of bacteriophage Qb coat

protein; Hepatitis B virus core antigen: particular carrier for vaccination and gene therapy; Construction of products of biologically active proteins by methods of genetic

engineering; Studies of regulatory mechanisms of bacteriophage RNA translation and

replication in forced evolution system. Structural models of regulatory regions on phage genome;

Modern methods of diagnosis and prognosis in therapy and prophylaxis of malignant tumours;

Genotyping and molecular diagnostics: breast cancer, melanoma, bacterial and viral infections.

Of the above research areas, those most directly related to geno-typing and gene therapy constitute the Centre’s core activities, to the extent that it lies in the foundation to the national gene bank project.


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11.7. Institute of Experimental and Clinical Medicine University of Latvia Institute of Experimental and Clinical Medicine is legally independent institute collaborating with: Faculty of Medicine, Faculty of Physics and Mathematics, Faculty of Biology. Main areas of Research: Bone physiology and osteoporosis; Muscle physiology, blood circulation and working capacity; Human physiological adaptation, prophylaxis of human physiological disadaption,

diagnostics, treatment; Carbohydrate metabolism, fatness problems, health and food; Cancer (tumour) cell biology - stem cell renewal problem, tumour resistance and

regeneration; Computer analysis of cancer cells in diagnostics and prognosis; Optimisation of cancer immunotherapy.


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11.8. Institute Of Biomedical Engineering And Micro Technologies

The Institute of Biomedical Engineering and Micro technologies is the division of the Faculty of Transport and Mechanical Engineering at the Riga Technical University. The institute incorporates: Division of Medical Engineering and Physics; Division of Electronics and Vacuum; Electromagnetic Non-destructive Testing laboratory; Division at the Institute of Physics of the University of Latvia for practical

placement, student’s projects and research; Division at the Institute of Inorganic Chemistry of the Riga Technical University

for practical placement, student’s projects and research. Research fields: Electromagnetic technologies for non destructive tests of materials; Electron spectroscopy directed to explore surface layer structures, electronic

properties and behaviour (biomaterials, biological tissue (bone), microelectronic materials) affected by different ways (radiation, chemical treatment, etc);

Radiation influence on bone. Main research projects are: Optically stimulated electron transitions on bone tissue characterisation (2001 –

2004) Secular trends depended structural and electronic properties of bone (2001 – 2004) Dosimetric properties of hydroxiapatite – collagen solid composite (2001 – 2004) Emission spectroscopy of material surface structure imperfections due to

technological processing and optimisation of reliability indices (2001 – 2003)


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11.9. Latvian State Institute of Wood Chemistry Latvian State Institute of Wood Chemistry was established in 1946 as the Institute of Forestry Problems within the Latvian Academy of Sciences. In 1997 the Latvian State Institute of Wood Chemistry participates in working out three scientific programmes of national significance. Raw materials of wood and the plant kingdom Possibilities of using wood biomass in obtaining cellulose, paper as well as

chemical and biotechnological products Substantiation of continuous and extended reproduction of high quality wood and

other forest products in Latvia The Institute participates in the implementation of 17 scientific projects (grants) as well as in the project of a new cellulose plant offering ecologically safe investigations, suitable for Latvian conditions, namely, substantial boiling of sulphate cellulose, bleaching of cellulose, recycling of printed waste paper. Main research areas: The protection and modification of wood and wooden materials; Pulp and paper production processes; The fibre properties of paper, cellulose and lignin structure; Cellulose derivatives, natural polymers for medical and veterinary applications; Poly-saccharide chemistry; Biotechnology and bio-engineering; Extractives for the production of plant protection agents and disinfectants; Polymer chemistry; Heat-insulating materials; Industrial waste water treatment by radiation methods.


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12. Annex 3. The most important research areas

12.1. Agricultural and Biosystems Engineering Studies of life processes and biological productivity of plants and animals

Institute of Biology

Microbiological processes and products in agro-food sector, composting, protection of environment

LU Institute of Microbiology and Biotechnology

Inventarisation and research of the most remarkable pathogens of cultivated plants for optimising computerised models of forecasting


Resources of biomass and mechanisation in the processes of conditioning


The possible role of oxidative stress and plant tissue specifications in the process of somatic morphogenesis


Influence of earth’s transformation on changes of flows of biogenic elements and organic substances in river basins of Latvia


Perspective plant culture oils in Latvia Riga Technical University

12.2. Food Science and Human Nutrition Food additives LU A. Kirhenšteins

Microbiology and Virology institute

Carbohydrate metabolism, fatness problems, health and food

LU Medicine Faculty Center of Experimental Surgery

Modification possibilities of milk fats and their use in production of food


12.3. Health and Human Performance Bone physiology LU Medicine Faculty Center

of Experimental Surgery Muscle physiology, blood circulation and working capacity


Human physiological adaptation, prophylaxis of human physiological disadaptation, diagnostics, treatment


Clinical physiology: bone muscles’ blood supply Latvian Institute of Cardiology

Arterial hypertension Latvian Institute of Cardiology


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Invasive cardiology Latvian Institute of Cardiology

Pharmacology: treatment of heart hypodynamics; possibilities of using original methods of radiokinetocardiography

Latvian Institute of Cardiology

Preventive cardiology Latvian Institute of Cardiology

Prosthesis - orthesis mechanisms synthesis Riga Technical University Muscular staples and rehabilitation of muscles Riga Technical University Osteoarthritis of the hip Riga Technical University

12.4. Biochemistry, Biophysics and Molecular Biology Reagents for molecular biology LU A. Kirhenšteins


Molecular biology and genetics LU Biomedical Research and Study Centre

Biotechnology recombinants LU Biomedical Research and Study Centre

Characteristics of humus substances and catalytic activity in degradation of pollutants


Determination of systematic belonging and quantitative properties of rhododendrons by using DNA analyses, biochemical and molecular systematics


Adenylato-desaminases structure of enzyme of glycoprotein nature and immunobiological influence


Use of characteristics of DNA topology for constructing microbiological and molecular system of sensors


Research of physiological and genetic properties of Lentinane producer, basidiomycete Lentinula edodes (Berk.) Sing.


Development of functional materials based on the investigation of structure and biomechanical properties of biological tissue


12.5. Biomedical Sciences Research of biomedicine LU Biomedical Research and

Study Centre Clinical biochemistry: influence of tripophane metabolites on metabolism of phospholipids

Latvian Institute of Cardiology

Possibilities of regulation of neuro-inflammation and immuno-reactions with melanocortines and their mimetics



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The role of nitric oxide in operating mechanism of anaesthetics and anti-ishemic preparations


Anti-microbic sensibility of bacteremia and urethra irritation agents


Melanocortines as regulators of the behavioural processes and neurochemical processes caused by substance addiction


Structure, electron properties and behaviour of biotissue and biomaterials


Secular trends depended structural and electronic properties of bone


Application of biotissue equivalent composites for ultraviolet dosimetry


Synthesis of new organic luminophores and dyes for biology and medicine


Biomaterials for medical application Riga Technical University Human blood vessels and their artificial grafts Riga Technical University

12.6. Natural Resource Ecology and Management Genetics, physiology, cytology, biochemistry, bioenergetics of microorganism


Biotechnology of microbial biosynthesis and conversion of renewables, bioengineering


Optimising of biofiltration system in degradation of waste gasses


Energy activity of multicomponent biofuel in internal combustion engines


Determination and identification of pollutants in water, soil and other samples


Investigation of xenobiotics Riga Technical University Ground and graundwater remediation, cleaner technologies


Development of ecologically harmless materials Riga Technical University Hydrobiology LU Institute of Aquatic

Ecology Marine ecology LU Institute of Aquatic

Ecology

12.7. Chemical Engineering (O-, S- and N-heterocycles, betaines), Latvian Institute of Organic

Synthesis bioorganic (peptides, prostaglandins, membrane active substances)

Latvian Institute of Organic Synthesis

organoelement (organic compounds of silicon, germanium, tin, metal complex catalysis)



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physical organic (NMR, ESR, mass spectroscopy, structural X-ray analysis, electrochemistry) chemistry


investigation of biological and pharmacological properties of synthesized compounds


High-power phycial-chemical processes in hard organic compunds


Catalytic oxidation of organic compounds Riga Technical University Sorption on interface: solid-vapour and solid-liquid Riga Technical University Synthesis and investigation of organic compounds for new molecular materials to be used in molecular electronics and optoelectronics


Ring-chain tautomerism of organic compounds. Synthesis and investigation of hetarylsubstituted 1,4-benzoquinones


Intramolecular and intermolecular charge transfer phenomena in organic systems


Organic compounds for materials having optical memory


Production and use of humic acids Riga Technical University Synthesis of biologically active heterocycles Riga Technical University Synthesis and investigation of nucleosides, nucleotides peptidosacharides


Synthesis of peptides and aminoacids Riga Technical University Membrane process applications Riga Technical University Modelling of chemical proceses Riga Technical University Biomechanical reaction of biomaterials in biological systems and its computer modelling


12.8. Veterinary Microbiology and Preventive Medicine Development of veterinary preparations LU A. Kirhenšteins


Epidemiology and control of productive animals and food infections in the Rpublic of Latvia


The meaning of antibacterial factors of humoral immunity in protection of udder and etipatogenesis of mastitis


Research of viral profile for patients of juvenile arthritis (JA)


12.9. Microbiology Immunology of viral infections LU A. Kirhenšteins



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Onco-virology LU A. Kirhenšteins Microbiology and Virology institute

Investigation of immune-modulators LU A. Kirhenšteins Microbiology and Virology institute

Cell biotechnology and viral indications LU A. Kirhenšteins Microbiology and Virology institute

Cancer (tumor) cell biology – stem cell renewal problem, tumour resistance and regeneration


Computer analysis of cancer cells in diagnostics and prognosis


Optimisation of cancer immunotherapy LU Medicine Faculty Center of Experimental Surgery

12.10. Biotreatment of wood resources Cellulose derivatives, natural polymers for medical and veterinary application


Chemistry of polysaccharides Latvian State Institute of Wood Chemistry

Pulp production processes, paper production processes and its properties; structure of cellulose; structure and use of lignin, biodelignification


Bioengineering and biotechnology Latvian State Institute of Wood Chemistry

Production and application of wood extractives, thermochemical processing of wood and ligno-cellulose-containing biomass


Polymer chemistry, materials for heat insulation and lacquers, biodegradable polymers


Possibilities of using wood biomass in obtaining cellulose, paper as well as chemical and biotechnological products


Substantiation of continuous and extended reproduction of high quality wood and other forest products in Latvia


Modification of wood and analysis of wood products Latvian University of Agriculture

latvia’s biopharma industry – competitive location of...

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