Julphar gets set for relaunch in Saudi Arabia

Dubai: Julphar, the UAE pharma company, is close to re-launching operations in Saudi Arabia … but this time through a brand new production facility. Going operational with the plant will be a major boost for the company in what is one of the largest health care markets in the region.

This will also help Julphar get over the Saudi ban on it supplying its range of medicines in the kingdom, which has been in force since September last year.

Jerome Carle

But now, the imminent launch of a production facility at the King Abdullah Economic City could provide the needed restorative powers to the company. “Julphar Saudi Arabia was awarded Current Good Manufacturing Practice (cGMP) approval by the SFDA (Saudi Food and Drug Authority), becoming the first facility in King Abdullah Economic City (KAEC) to earn full cGMP certification on its first inspection,” said Jerome Carle, CEO. “The facility is now ready to operate in the Kingdom.

“In December last, we were granted a new cGMP certification from MOHAP (Ministry of Health and Prevention in the UAE), which is a clear indication that our products meet all necessary regulations and standards. Towards the end of April, we were successfully audited by the Gulf Health Council (GHC).” (The cGMP approval is one of the steps that need to be cleared before the all-clear is given to launch production.)

The Saudi plant has an installed capacity for 1 billion tablets, 300 million capsules, 30m bottles of syrups/suspensions. (In the UAE, where it operates 13 plants, excluding Gulf Inject in Dubai, it’s current capacity is 3 billion tablets, 945 million capsules, 4 billion paediatric powder suspensions (PPS), among other categories.)

The Ras Al Khaimah government is the biggest shareholder in the company.

Still talking to Saudi authorities on export ban

Julphar is still negotiating with Saudi authorities to get the ban lifted. The loss of the Saudi market did hurt its 2018 numbers, which saw the company report a net loss of Dh153 million on sales of Dh863 million.

“We have been in close contact with SFDA since September to address the recommendations highlighted in their report,” the CEO added. “Since last year, we have been working hand in hand with the UAE’s Ministry of Health and they have supported us at every stage. We respect the decision of the SFDA, their guidelines and their standards.

“The temporary ban on the export of our products applies only to Saudi Arabia and Bahrain. Our products continue to be sold in 50 markets around the world.

“We strive to be a successful company in the region and we understand that this is only possible 
if we work in partnership with authorities such as the SFDA. We expect the SFDA to re-inspect our facilities soon.” 
Apart from the Saudi ban, currency devaluations and political turmoil in the region also had a hand in crimping Julphar’s 2018 financials. “We have had some setbacks but in spite of that, we generated good momentum in a number of areas, which we will build on,” said Carle.

“Challenges still lie ahead, but we are taking steps to strengthen our financial health as part of a new strategy that will see us increasing our effectiveness and efficiency. We have already started a “transformation programme” that aims to make the company more competitive.

“We will stay focused on the transformational goals laid out in our strategic plan and follow through with our new product launches and portfolio optimisation. We continue to roll-out our cost-saving programmes, which will position our business well to maximise cash flow generation.”

Systemically vital

With UAE and Gulf health authorities keeping a close watch on the mounting cost of health care and of drug prices, entities such as Julphar through local/regional production capacities ensure drug prices remain in check. They specialise in generic drugs (ie, versions of drugs that have come out of patent protection). In recent times, new entities have set up ambitious projects in the UAE, including Neopharma and in December last, Pharmax commissioned a Dh125 million plant at Dubai Science Park to make medicines for diabetes, cholesterol, psychiatric and neurological disorders.

But rather than cater to the domestic market alone, these ventures need to tap into as wide a market base as possible to make those investments pay off.

Is the increased competition from new local or regional manufacturers impacting Julphar margins? “Anything that will boost the local pharmaceutical industry and offer customers more choice is a move in the right direction,” the CEO said. “In the public health sector, where fixed budgets place limits on treatment, more affordable medicines could extend treatment options.

“And for consumers, more affordable prices will widen medical insurance cover and reduce out-of-pocket payments. This makes it imperative that we consistently meet the requirements of our customers, as well as all regulatory and legislative bodies.”