Pharmaniaga’s growth plans

The group’s focus in the near term would be South-East Asia, says Zulkarnain.

THINGS are looking up for Pharmaniaga Bhd, at least for the next five to 10 years. The homegrown pharmaceutical company has ambitious plans not only to strengthen its foothold in existing markets but also to foray into new international markets.

For the last two decades, the group had established a strong market presence in Indonesia for drug manufacturing and logistics and distribution (L&D). Now, Pharmaniaga has set its sights on markets like the Middle East, Africa and the United States.

Group managing director Datuk Zulkarnain Md Eusope reveals that the group plans to expand its Indonesian L&D operations this year, by opening new branches in Pematang Siantar (Sumatra), Purwokerto (Java Island) and Lombok (West Nusa Tenggara).

To date, there are more than 2,000 pharma distributors in Indonesia. Pharmaniaga’s subsidiary, PT Millennium Pharmacon International Tbk (MPI), is one of the national distributors established there. MPI covers the whole of Indonesia, with a total number of 33 branches.“Revenue from our business in Indonesia is increasing, at an average of about 10% to 12% per annum. The market there is big.

“We want to strengthen our operations in Indonesia by transferring the research and development developed for our products to our manufacturing plants in Indonesia. To date, more than 100 registered products have been brought to our plants there,” he says.

Pharmaniaga is also working closely with Islamic Development Bank (IDB) to market its offerings in the Middle East.

This is in line with Pharmaniaga’s plans to make halal certified vaccines and insulin at its small volume injectable plant, Pharmaniaga Life Science Sdn Bhd (PLS).

Recall that this was the plant that was used to fill and finish the manufacturing of Covid-19 vaccines, which were then delivered to selected vaccination centres as part of the National Covid-19 Immunisation Programme.

“IDB sees Malaysia, Pharmaniaga in particular, as one of the leading manufacturers of halal pharmaceutical products in this region. Right now, there is a spike in demand for generic drugs in the middle eastern countries due to the rise of foreigners going into that region. These foreigners are mostly from India, Pakistan or the Philippines who seek generic drugs over brand-name medicines as it is cheaper,” says Zulkarnain.

He adds that through its collaboration with IDB, the group was able to engage with The World Bank which provided Pharmaniaga access into the African market for generic drugs. Additionally, the group also looks to have a share in the pharmaceutical market in the United States.

“One of the big US pharmaceutical companies paid us a visit and they were impressed to see that our manufacturing plant adheres to international standards. We intend to complete the US food and drug administration registration for our facilities in the next few years,” say Zulkarnain.

Nevertheless, he adds that the group’s focus in the near term would be South-East Asia.

Regional focus

“We are talking about countries like Vietnam, Cambodia, Myanmar, and Laos. The entire South-East Asia region has close to 700 million people. This is the market that we want to focus on at the moment,” he says.

Zulkarnain maintains an optimistic view for the outlook of the pharmaceutical industry with a projected compound annual growth rate (CAGR) of 12% to 15% for Malaysia.

“The industry will see an upward growth trajectory should there be an economic recession or not. We target to hit RM5bil in our revenue by 2025. Last year, our revenue was at RM3.5bil. For 2023, we are targeting to reach a revenue of RM3.8bil,” he says.

Talks to set up a halal biopharmaceutical plant actually began in 2017, when Pharmaniaga sought to collaborate with various international partners including China-based Sinovac Life Sciences Co., Ltd (Sinovac).

At that time Pharmaniaga was already in the process of setting up a fill-and-finish manufacturing facility (where vaccines are decanted into glass vials) for halal vaccines under PLS, focusing mainly on pediatric vaccines.

However, when the pandemic erupted, Sinovac shifted its focus to Covid-19 vaccines, in which Pharmaniaga also followed suit.

“We spent about RM10mil to retrofit our PLS plant to carry out fill-and-finish manufacturing activities. So far, we have already invested close to RM260mil in our facilities there.

“The barriers of entry into the biopharmaceutical industry are high especially with regards to the cost of investment. This is why there are not many players in this sector. Many are focused on developing generic drugs,” says Zulkarnain.

In order to receive the green light in vaccine manufacturing, Pharmaniaga underwent a slew of stringent regulatory tests with the government.

“Other than having the necessary expertise in developing vaccines, we also need to have the proper facilities that meet international standards.

“Our plants in PLS have been inspected by the National Pharmaceutical Regulatory Agency (NPRA, the national drug authority that sits within the Ministry of Health) a year before we decided to embark on fill-and-finish manufacturing activities which we need to complete before entering into vaccine production,” Zulkarnain says.

Though the fill-and-finish process is the last stretch of vaccine manufacturing, it is a critical step in ensuring the quality, efficacy, and safety of a drug. The group’s experience in the fill-finish development for Covid-19 vaccines gives it an edge over its peers in the biopharmaceutical industry.

“PT Bio Farma is the only other company in the South-East Asia region apart from Pharmaniaga that have vaccine fill-and-finish capabilities. In fact, they are also one of our partners.

“Hopefully, when our facilities at PLS come online in the next year or so, Malaysia will be able to reduce its import dependencies under the National Immunisation Programme, especially for children,” says Zulkarnain.

In its latest update, the group announced that its vaccine plant is targeted to be completed by the third quarter of 2023 (3Q23), having passed all the required tests to administer vaccine testing equipment.

A pre-filled syringe filling line, the first of its kind in the country, was also installed in the plant.

Pharmaniaga also states that its insulin project is expected to be fully operational by 4Q23. The plant’s factory acceptance tests (FAT) for labelling and blister packaging machines were completed in December last year. Other FATs like dispensing booths, washer-steriliser, cartridge filling line etc. are to take place this month.Thinking big

Meanwhile, Zulkarnain says that Pharmaniaga wants to become the national drug company.

Zulkarnain recalls the crisis that the country faced during the Covid-19 pandemic in trying to secure sufficient vaccines.

“We had a difficult time in rolling out the vaccines as there were many requirements and standards that we needed to meet,” he quips.

He recalls that when the government (through the NPRA) sought data from the drug companies about those vaccines, not all provided the necessary data.

“There was no room for any mistakes. Procuring the vaccines during the pandemic was a matter of life and death,” he says.

To be sure, this was a problem faced by all countries worldwide during the race to secure Covid-19 vaccines. Zulkarnain says Malaysia should strive not to be in such a situation again. His solution: steer Pharmaniaga into becoming a national drug company.

“We are taking a bold step in saying that we want to become a national drug company. On the one hand we want to build our expertise in making vaccines, on the other hand this is about strengthening the drug security of our nation.“If and when another pandemic happens, we want to ensure that Malaysia will not be entirely dependent on other foreign drug companies again,” he says.

He cites building up Pharmaniaga’s ability to the next level from where it is today, as a big producer of pharmaceutical drugs and biopharmaceutical products.

Currently, the group has a total of 384 registered products for biopharmaceuticals and pharmaceuticals.

“We have more than 250 products in the pipeline for the next ten years. We intend to launch 100 products in the next five years. Our research and development division spent approximately RM20mil to RM25mil on product development activities per year,” says Zulkarnain.