Russia’s government investment firm Rusnano has teamed up with the U.S. venture capital firm Domain Associates in an effort to bring next-generation medicines, medical devices, and diagnostics to Russia. The two investment firms have agreed to jointly invest in innovative companies with an eye to developing novel products that could be manufactured in Russia.

Under the agreement the two will invest in approximately 20 U.S.-based companies developing technologies that can address unmet needs in Russia and complement Rusnano’s focus on nanotechnology-based innovation. They will also jointly establish a drug and medical device manufacturing facility in Russia that meets GMP standards.

“We are working hard to spur development of innovative technologies in the Russian healthcare industry,” says Anatoly Chubais, CEO of Rusnano.

The joint venture will leverage the technology of portfolio companies, and will obtain exclusive rights to manufacture and market products based on these technologies in Russia and the Commonwealth of Independent States. Rusnano and Domain’s venture capital funds, together with other co-investors, are expected to invest approximately $760 million into portfolio companies and the manufacturing facility in Russia. The joint venture will manage advanced-stage clinical trials in Russia of new pharmaceuticals and other products that will support regulatory approval of these products in Russia, the United States, and other markets.

“We expect Domain’s collaboration with Rusnano to provide a significant boost to the modernization efforts of the Russian pharmaceutical and medical technology industry,” says Brian Dovey, partner at Domain. “For our portfolio companies, this strategic relationship opens up new attractive avenues for financing. Finally, we are excited about the commercial potential of establishing a cutting-edge production facility in Russia.”

Rusnano has made significant investments in U.S. and European innovation since its founding in March 2011. In October 2011 it invested in two Massachusetts-based companies, Bind Biosciences and Selecta Biosciences, both of which received funding to set up manufacturing facilities in Russia. Rusnano also entered into a joint venture with Celtic Pharma in September called Pro Bono Bio that will use nanotechnology to develop new treatments for a range of inflammatory conditions and infections that can have a significant impact on the Russian healthcare system. The drugs will be manufactured in Russia and Europe and marketed throughout Europe.