The H1N1 virus is still spreading globally – a worrying trend, no doubt – but an apparent boon to pharmaceutical industry around the world, including that of Ras Al Khaimah (RAK). While economic uncertainty has plagued most sectors recently, the historically non-cyclical health industry – and the pharmaceutical sector in particular – has been faring well, receiving an additional boost from the fallout of the global swine flu pandemic.
On 22 October Gulf Pharmaceutical Industries (Julphar), based in RAK, announced third-quarter results, which included healthy growth in sales figures driven by strong private market demand, according to the company's statement. Overall, sales revenues were up nearly 30% in the first nine months of the year, compared to the same period in 2008. Private market sales saw year-on-year (y-o-y) growth of over 40% during the January-September interval, while tender sales rose by 12% y-o-y.
Julphar was established in 1980 under the guidance of RAK's ruler, HH Sheikh Saqar Bin Mohammed Al Qasimi, and has since expanded to become one of the largest pharmaceutical manufacturers in the Middle East. It is publicly listed on the Abu Dhabi Securities Market and the government of RAK is the largest minority shareholder. The firm now boasts nine production plants in the UAE and a commercial presence in over 45 countries, specialising in the production of a broad spectrum of generic medicines.
While the markets did not react much to the announcement of Julphar's third-quarter results, closing prices remained high – at around 1.85 – on the back of momentum from a recent stock rally sparked by a different announcement. Trading reached an annual low in late December of 2008, closing at 1.08.
On September 23 Julphar declared it had struck an exclusive agreement with the Hualan Biological Bacterin Company – a leading Chinese biopharmaceutical producer – to mass-produce single doses of Hualan's H1N1 vaccine formula for regional distribution. While the agreement will not be made official until production methods are fully approved by the UAE Ministry of Health – a process currently under way – the volume of Julphar stock jumped by nearly 150% in one day following the announcement, from 288,220 to 715,574. Closing price rose an impressive 8% in the same day, from 1.83 to 1.98.
The Julphur-Hualan agreement names Julphur as the exclusive producer of Hualan's H1N1 vaccine for the Middle East and North Africa region. The Chinese firm will provide raw materials and the technical knowledge required for producing the vaccine and the UAE firm will manage the manufacturing in its local factories. Julphar company officials have set a production start-up target for January, though, again, production is contingent on meeting various Health Ministry protocols before then.
Like elsewhere around the globe, H1N1 – popularly known as "swine flu" – has emerged as a serious public health concern in RAK and the wider UAE.
Speaking to the local press in late September, Dr Ayman Sahli, the general manager of Julphar, stated that the company will produce enough vaccine “for the entire requirement of the UAE” but, he added, may not be able to meet the needs of the whole region though some quantities will be exported.
Pending the Health Ministry's approval – which is widely expected by industry observers – Julphur's vaccine production will represent a significant step in the evolution of the local and national health sector.
Traditionally, the Gulf Cooperation Council has been reliant on imports for its pharmaceutical needs. Julphar – which specialises in generic products over a broad pharmaceutical range – along with other regional producers has cut consumer costs and widened the spectrum of available pharmaceuticals in the region. In the case of RAK, Julphar is also a prominent plank in the emirate's continually growing industrial platform – part of efforts to diversify the overall economy.
Moreover, local and federal attempts to control H1N1 mark an important step in the evolution of health infrastructure as the population of the UAE continues to expand at a rapid clip. Besides the coming vaccine, Abu Dhabi's Neopharma is producing the generic version of Tamiflu – the antivirul drug used to treat H1N1. The UAE Health Ministry has threatened to fine any hospitals that do not report cases of H1N1 contagion in an effort to more accurately monitor the virus' spread.
On October 26 US President Barack Obama declared H1N1 a national emergency, mainly in order to ease bureaucratic restrictions involved in administering vaccines. The move nevertheless refocused attention on the virus and also helped to send the stock of pharmaceutical companies producing the vaccine soaring – Hualan's shares, for example, jumped to the 10% daily trading cap on the Shanghai composite index.
As panic over the pandemic increases in the coming flu season, countries around the world are stepping up efforts to contain the virus, and the UAE looks particularly well placed to deal with any outbreaks.