Innovation made affordable

Two years after the implementation of the first major reform, what is your current view of the Egyptian economy?

Post-Egyptian pound devaluation, Egypt has succeeded in implementing a rigorous reform program, starting with the Egyptian pound floatation. Definitely in the beginning it led to some market instability. However, two years later Egypt is witnessing more economic instability in a number of industries.

Strong policy implementation will allow for a more favorable macro-economic outlook, where companies can adapt to the new economics of the now-different industry dynamics.

How important is it for the government to pursue further reforms in order to achieve sustainable and inclusive growth cycle?

The Egyptian government is reacting positively, allowing the pharmaceutical companies to raise the selling prices for more than 3,000 medicines, which helped to partially offset the rising cost of imported raw materials.  That helped but it didn’t offset the price of raw materials.

It’s very important to build on the progress made and enhance revenues as part of public enterprises reforming; this will help create fiscal space for high-priority sectors like health and education.

Also implementing the new health insurance program that will extend the coverage to millions of Egyptians will have a significant impact.

The government does offer incentives for Egyp­tian-manufactured products, but without a strategy to encourage innovation, the importation of expensive finished products is likely to continue. Aside from the economic burden, this could limit access to modern medica­tions that contribute to the quali­ty and duration of human life.

What is your current assessment of the health of the Pharma industry in Egypt?

Despite previous political and economic turbulence, Egypt remains to be one of the largest producers and consumer of pharmaceuticals in the Middle East and Africa

Following the economic instability due to devaluation, there was a drop in unit consumption of pharmaceuticals that has quickly recovered back to normal levels after the second year.

Egypt’s pharmaceutical sector is seeing increasing attention from investors and, starting in 2018, we foresaw growing stability for businesses capable of adjusting to the new economics of a changing industry.

What steps still need to be taken to increase the competitiveness of the sector in terms of regulatory reforms?

Medicine is vital and is remaining to be in high demand. Egypt cannot withstand on the medium to long term the continuous and immense pressure of importing finished product on its health care budget.

The lack of regulations on imports of finished products jeopardizes the industry’s medium and long term future. Regulatory reforms on imported medicines will pave the way to balance imports and exports, focusing primarily on local manufacturing while confining importation to exceptional products that cannot be temporarily accommodated by current technologies in Egypt.

Many countries have adopted this pathway giving priorities to local manufacturing of pharmaceutical products such as Morocco, Tunisia and Algeria. Special considerations to push to tech transfer laws to ensure greater strength of pharmaceutical technology innovation and hence, limit importation as much as possible.

How important is it for the sector to upgrade its manufacturing capabilities to increase its resilience to external shocks?

The global advances in therapeutic approaches to unmet medical needs is shifting from small to large complex molecules and advanced therapy medicinal products (ATMP), while limited attention is given to developing strategies to accommodate the growing demand for complex biologics versus the production of simple molecules.

Several national health authorities across the world have put in place regulations to encourage the use of innovative technologies for bio-similars by authorizing tax incentives and subsidies.

They set new plans to boost technology transfer for imported products, which need advanced know-how packages to manufacture them locally while applying legal and financial measures to promote research and development. Other countries like Brazil and Turkey incentivized local manufacturers who are active in R&D areas by eliminating income taxes and putting custom tolls and duties on imported drugs that are produced locally.

What is the potential of Egypt to become an export-oriented pharma hub?

Egyptian pharmaceutical companies have always focused on the domestic market in view of its high demand with little attention to exports and expansion outside Egypt. There has been a change in the past years where some Egyptian pharmaceutical companies embarked on joint ventures in other regional markets, mainly in the Gulf, and put more focus on exports, especially after the currency floatation which made the Egyptian medicine even more attractive.

The GCC and Arab markets are also natural prime partners for Egyptian businesses given the geographical proximity, socio-political ties, as well as economic and market familiarity given the significant existing cross border investments.

What is the potential of biotechnology drugs in Egypt and the region?

The future of medicine is directed towards biotechnology drugs such as immune-therapeutics in order to fulfill unmet medical needs.

While the focus in Egypt is still on small molecules, Minapharm was an early recognizer of the shift in the health-care industry and embarked on a transition towards large, complex molecules ready to bridge to next-generation medicines. As a result, we established Rhein Minapharm, the first R&D and manufacturing biopharmaceutical facility in Egypt, Africa, and the Middle East, followed by the acquisition of ProBioGen AG, the renowned cell engineering specialist and CDMO (contract development & manufacturing organization).

Can you tell us more about the inception of Minapharm?

Minapharm ranks among the leading pharmaceutical companies in Egypt and the Middle East. Its longstanding expertise covers a broad spectrum of medicines, ranging from small molecules to extremely complex bioengineered proteins. Minapharm partners with global leaders to manufacture and market branded products and first-to-launch galenic formulations that are customized to market needs. Minapharm produces more than 150 products under specialized lines in the fields of gastroenterology, cardiology, ophthalmology, orthopedics, urogynecology, dermatology, and more.

In the late 90s, Minapharm embarked in a joint venture with a European bio-technology leader to establish a first-of-a-kind company in Egypt, Africa and the Middle East, specialized in the research, development, and manufacturing of complex genetically engineered products for unmet medical needs.

In 2010, Minapharm consolidated its business model by acquiring ProBioGen AG, a Berlin based internationally renowned contract development and manufacturing organization, provider of intelligent proprietary technology to the international biotech industry with a focuson cellular engineering

Could you comment on the importance of biotech within your business model and the results it has achieved thus far?

The joint venture with Rhein Biotech (2003) followed by the acquisition of ProBioGen (2010) have resulted in a unique and successful business model for Minapharm’s biotech arm, enabling us to accomplish our mission: “innovation made affordable”.

The joint venture with Rhein Biotech has enabled Rhein Minapharm to use processes from Europe to manufacture protein API. The establishment of an R&D department in 2004 has further substantiated process development of new products from new cells. The API produced by RM is further formulated and manufactured into FP in MP to be registered and marketed and commercialized following clinical development.

The acquisition of ProBioGen has further strengthened the model by allowing backward integration to start from the cell – exploiting their advanced capabilities in cell line development technologies and cellular engineering using mammalian cells.

Therefore, Minapharm owns the complete value chain from the gene all the way to the finished product, allowing us to provide the most innovative products in an affordable way to Egypt and the region.

As you moved towards complex high-value biologicals, how important has it been to build innovative capabilities?

Minapharm has realized early the importance of transition to large complex molecules and advanced therapy medicinal products (ATMP), to accommodate unmet medical needs.

The establishment of a hybrid bioengineering R&D community of Egyptian and German scientists allow us to constantly innovate, with synergistic projects driving technology transfer between Cairo and Berlin.

Minapharm continues to venture into the future of biotech by investing in new state-of-the-art facilities in Egypt as well as in Berlin, opening the door for synergy projects to jointly develop and produce modern immunotherapies for Egypt, the MENA region, and beyond.

How do you see the evolution of Minapharm in the coming years, especially in terms of innovation and production capacity?

From a regional technology driven manufacturer of affordable complex medicines, Minapharm has transformed into a global provider of intelligent technologies to the biotech industry at large. Such transformation has been enabled by the acquisition of ProBioGen AG.

Synergistic projects are constantly driving technology transfer between Cairo and Berlin, investments in two new facilities, complying under EMA regulations in parallel with increasing process manufacturing capacities to be compatible with future demands.

Minapharm is giving its Berlin-based subsidiary, ProBioGen, the free reign to expand its business and strengthen its solid customer base that includes large pharma players from across the continents.

It is, therefore, not unlikely to see Minapharm implementing a radically ongoing transformation of the global healthcare industry from yesterday’s traditional chemical compounds to today’s complex genetically engineered medicines and tomorrow’s advanced therapy medicinal products

Through the years you have collaborated with some of the biggest global brands in the pharma industry. What role do foreign partners play in your business model and what do you believe is the added value you bring to the partnership?

Minapharm’s strategic multi-alliances with world leaders in their specialties are the basis of our regional leadership. At the technology transfer level, our cooperation with European and American partners allows us to provide locally manufactured products with the same quality standards as in the European market, in an affordable way not only for the Egyptian market but for other emerging countries.