The company’s plant for diabetes products

The company’s plant for diabetes products

Julphar strategising for growth

April 2015

Over the past 35 years, the company has accumulated plants and a product portfolio that have made it one of the biggest players in the Gulf’s pharmaceutical industry

New developments in Julphar, already a major force in the Gulf’s pharmaceutical industry, are strategically aimed at seeing it edge forward and emerge as a still more powerful player in the industry in coming years.

The Ras Al Khaimah (UAE)-based company’s recent acquisition of a majority stake in a Bangladesh plant, plans to expand its manufacturing facilities in Ethiopia, location of its first overseas plant, and a proposed new plant in Saudi Arabia signify it is increasingly looking overseas to drive sales and strengthen its influence.

Sales are doing well with the company reporting they climbed 5.2 per cent to Dh1.43 billion ($389 million) in 2014 vs 2013.

It expects the sales curve to continue to rise as other pacts it signed in recent months yield good business results.

Last year it signed a five-year licensing deal with global healthcare prodder MSD (Merck in the US and Canada) which gives it exclusive rights to produce, market, distribute and sell certain MSD medicines in the UAE, Kuwait, Bahrain, Oman, Qatar and Iraq.

Julphar will manufacture some MSD products for the first time in this region including therapies for diabetes, asthma, allergy, pain and inflammation. For MSD, as its vice president for the region stated, the partnership means “a stronger focus on innovative ways to address critical diseases and a closer connection with current and potential customers.”

For Julphar, it is another business- and confidence-boosting move. “Manufacturing locally high-quality medications will enhance accessibility and create greater value for all our stakeholders,” its CEO Ayman Sahli said.

A Julphar plant in Ras Al Khaimah

A Julphar plant in Ras Al Khaimah

Diabetes, a therapy for which Julphar will manufacture as part of the pact, is an important part of the UAE company’s vision because it afflicts a significant portion of the UAE’s and Gulf’s population but also because it makes good business sense, the possibility of exports to neighbouring regions always present.

Back in 2012, Julphar opened its Diabetes plant for manufacturing and commercialising diabetes products. Total capacity at opening was 1,500 kg of insulin, roughly 40 million vials per year. Capacity was to be scaled up based on demand for both crystals, which will be sold to other manufacturers of insulin, and finished product, based on registrations and approvals.

The new facility gave Julphar the ability to make insulin all the way from raw material to finished products. The capacity allowed it to add insulin analogues after their loss of exclusivity. The benefits came in the form of a two-fold access – financial access for economically disadvantaged patients and geographic assess for smaller cities and towns where the company’s products were available.

Julphar invested over $150 million in Julphar Diabetes. It first began producing insulin eight years earlier from insulin crystals imported from Europe for the local production of Jusline. With the new plant, Julphar began producing the crystals in-house.

The company has made available in the UAE and the region, a revolutionary digital continuous glucose monitoring device (CGM) that helps patients easily and conveniently monitor their glucose level around the clock. It followed an exclusive agreement with the manufacturer, Dexcom, a world leader in glucose monitoring systems.

Julphar, established in 1980, maintains a diverse product portfolio which targets major therapeutic segments including Consumer Care, Cardiopulmonary and Metabolic Care, Pediatric Primary Care, Adult Primary Care, Wound and Blood Care, Women’s Care, GIT and Pain Management, Over the Counter and Diabetes Products.

With over 800 products produced in various dosage forms and more in the pipeline, the company’s focus is on generic drugs.

Another view of the diabetes products plant

Another view of the diabetes products plant

Julphar’s acquisition of a majority stake with RAK Pharmaceuticals of Bangladesh at a price of $9.5 million, marks its entry into a highly populated country market and signals possible expansion into the wider Asian sphere.

RAK Pharmaceuticals produces a variety of industry-compliant tablets, capsules and syrups and had sales of $5.7 million in 2013, representing 24 per cent growth. The pharmaceuticals market in Bangladesh is worth $1.3 billion.

“The size of the Bangladesh market alone provides huge investment opportunities, which can enhance the growing role of Julphar in the global healthcare industry,” said Julphar chief executive Sahli. “RAK Pharmaceuticals is a relatively young, fresh company with solid infrastructure, growth rates and a healthy pipeline.

“The stable investment outlook and the growing healthcare needs of a large, mostly underserved population make Bangladesh an attractive market for investors. Healthcare plays a major role in the expanding economy for Bangladesh and with this comes a clear need for increased manufacturing,” said Sahli.

The other overseas opportunity Julphar is concentrating on is its investment in Ethiopia which it hopes to extend to cover the construction of Africa’s largest plant for injectable medicine.

Julphar had invested $9.7 million in a plant in Ethiopia to produce an assortment of pharmaceuticals. For the expansion, the company has secured a plot of 11,000 sq m in Addis Ababa. The plant will meet the demand for insulin from patients with diabetes on the African continent.

When Julphar opened its first plant in Ethiopia in 2013 with its local partner Medtech, it got a green signal for further expansion from the Prime Minster Hailemariam Desalegn who said at the time:  “Ethiopia is one of the fastest growing economies in the world with a growing population … You can count on government support. Our doors are always open.”

Another overseas manufacturing opportunity for the UAE company is a plant to be built in King Abdulla Economic City, Saudi Arabia. It is planned to be developed as a joint venture with Cigalah Group and the proposal for the project came up way back in 2011.

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