HEALTHCARE

INVESTORS TAKE NOTICE OF SAUDI’S HEALTHCARE POTENTIAL

Saudi Arabia has struck a strategic partnership with Janssen Pharmaceuticals, an arm of pharmaceutical giant Johnson & Johnson, focusing on innovation, healthcare, and the life sciences sector.

The two parties said they will work together over the next five years in key areas, including enhancing the biotechnology business ecosystem, advancing clinical trials and the utility of health data, enabling robust research and innovation characterised by strong IP legislation, and the development of talent and expertise in medical biotechnology.

“The MoU includes the creation of an ‘Innovation Incentive Scheme’ and delivers access to Johnson & Johnson’s venture capital resources, which is designed to support the growth of local and global pharmaceutical firms,” the companies said.

The partnership comes amid one of the worst global health crisis in modern history, which has highlighted the importance of innovation in the industry, reliability of local supply chains, and robustness of the domestic industry so as to be able to respond effectively to future health crises.

“The case for investing in the life sciences and healthcare sector has never been clearer, as we continue to fight this global pandemic,” said Eng. Khalid bin Abdulaziz Al-Falih, the Saudi minister of investment.

“The sector has shown remarkable innovation and agility to deliver the COVID-19 vaccine at such a rapid pace, an achievement that would have not been possible without significant investment. It is against this backdrop that the Ministry of Investment further strengthens its partnership with Janssen, a giant in the global life sciences sector, to nurture innovation and grow our knowledge base here in Saudi Arabia.”

Janssen is among several global pharmaceutical brands attracted to the kingdom’s opportunities, low cost of doing business, and business-friendly reforms. Janssen will recruit 230 employees at its Riyadh office, and build on its expansion plans in the kingdom. Last year, the company signed three memoranda of understanding with King Abdullah University of Science and Technology (KAUST), SPIMACO, and SaudiVax.

In February, the Saudi Ministry of Investment also signed a similar agreement with Swiss biopharma giant Roche. The two parties already have a number of the new collaborations under way, including a policy alliance to enhance the clinical trials industry in the kingdom and identify potential investment opportunities.

“Saudi Arabia’s nascent biotechnology and life science industries will play a central role in driving our post-pandemic economic recovery,” Al-Falih said.

The two deals highlight the range of investment opportunities available in the kingdom’s life sciences sector.

In September, Saudi Arabia also signed memoranda of understanding with Pfizer and AstraZeneca, featuring a pact with the latter to set up clinical research centres, during the Riyadh Global Medical Biotechnology Summit.

The three-day event, which welcomed 50 speakers and 112,000 registrants, focused on medical technologies.

“We aim at bringing together, in a unique interactive and dynamic global summit, key local and international players in biotech R&D and industry, and to formulate what will be the Riyadh Declaration for Biotechnology in order to make KSA a gateway to thriving biotechnology,” said Bandar Al Knawy, chief executive officer at the Ministry of National Guard Health Affairs.

InvestSaudi, an arm of the Ministry of Investment, has identified a number of healthcare segments that are attractive to domestic and global healthcare companies.

These include opportunities in long-term care, post-acute rehabilitation, home healthcare, biopharma products manufacturing, and generic drugs manufacturing.

InvestSaudi has recognised a USD 394 million investment opportunity to develop a generic drugs manufacturing facility either fully owned or in partnership with private sector partners. The government is guaranteeing an offtake agreement.

InvestSaudi believes investment in the facility can help address rising prevalence of chronic diseases and the increasing geriatric population in the kingdom are some of the major demand drivers for pharmaceutical products.

“Demand for drugs is projected to increase as the population ages, new pathogenic conditions are diagnosed, and personalised treatment regimen comes to the fore,” the ministry noted. “Increases in life expectancy, changes in social lifestyles, and environmental changes are leading to new and attractive opportunities for generics manufacturers.”

Similarly, the entity is eyeing a USD 300 investment in long-term care (LTC) facility from international companies.

Many acute care treatment beds in hospitals are occupied by LTC patients, putting pressure on the availability of hospital beds. There is also an increasing need for chronic healthcare, especially to tackle Alzheimer’s, dementia, Parkinson's, and multiple sclerosis conditions among the growing elderly population (3.4% are over 65 years old in 2019 versus forecast of 17% in 2050).

“Saudi demand for LTC is expected to reach ~18,000 beds in 2030 due to growing incidences of lifestyle diseases such as diabetes, obesity, and hypertension, and increasing number of people with disabilities due to accidents and stroke,” the ministry noted.

The efforts to attract foreign investment and expertise in the kingdom’s healthcare sector is part of the Vision 2030’s key goals to raise the standard of living and healthcare in the country.