Julphar expects Saudi trade suspension to be ‘lifted’ in few weeks

In September last year, the Saudi Food and Drug Authority (SFDA) temporarily suspended imports from the UAE-based Gulf Pharmaceutical Industries (Julphar) due to non-compliance with manufacturing regulations. This decision came after several violations were detected in an SFDA inspection. 

The company’s nine months (9M) 2018 profits took a hit by the temporary suspension as products were withdrawn from the market.

However, in an exclusive interview with Argaam, Jerome Carle, general manager of Julphar, revealed that the pharma firm has been working extensively with health authorities in the Kingdom to address their recommendations and implement corrective measures.

Excerpts from the interview:

Q: Once trade was suspended by SFDA in September 2018, what steps have you taken to address the issues of irregularities?

A: We have been in close contact with the Saudi authorities since September 2018 to address the recommendations highlighted in the initial SFDA report. We have also been working hand in hand with the UAE Ministry of Health and Prevention (MOHAP) and they have supported us at every stage.

We are regularly audited and inspected by the leading health authorities in the world. In December 2018, we were granted a new Current Good Manufacturing Practice (cGMP) certification from MOHAP, which is a clear indication that our products meet all the necessary regulations and standards.

Furthermore, last month, we were awarded GMP certificates from the Ministry of Health in Kenya. We have also carried out upgrades to our J1, J3 and J4 plants to increase productivity and ensure we continue to meet the necessary requirements. 

At this stage, we have actioned all recommendations highlighted in the initial SFDA report and we expect to welcome their inspectors back to Julphar soon. Furthermore, our management is confident about the future of our company and our operations in Saudi Arabia.

Read: Saudi FDA suspends imports from UAE's Julphar on violations

Q: When do you expect the trade sanctions to be lifted?

A; We expect everything to be resolved in the next few weeks. Julphar Saudi Arabia was awarded cGMP approval by SFDA last year becoming the first facility in King Abdullah Economic City (KAEC) to earn full certification on its first inspection. The facility is now ready to operate in the Kingdom.

Q: How has the trading suspension affected your financials in Q4 2018 and so far in 2019?

A: We had some setbacks in 2018 but in spite of that, we generated good momentum in a number of areas, which we will build on in 2019. While now largely behind us, the impact of the suspension in Saudi Arabia has been significant and will continue in 2019. Challenges still lie ahead but a new Julphar is emerging.

Optimism looms large as the company has started the year on a positive note with the preparation of our new road map for the next five years. We have market leading products, a very committed team and this is a good recipe for success.

Read: UAE pharma firm reports 9M losses on Saudi exports ban

Q: How have you decided to compensate or get back into profitability following the suspension lift?

A: We have started a Transformation Program that will make the company more competitive in the new business reality. As the region faced major prices reduction in the last three years, we have revisited our product pipeline and took many decisions to optimize our product portfolio.

Resources have been directed towards the key growth drivers, an updated research and development (R&D) strategy is being implemented, and expenses have been managed tightly. We continue to roll-out our cost-saving programs, which will position our business well to maximize cash flow generation.

As we move forward, we have to ensure we are well equipped to respond to the constantly evolving marketplace while generating long-term value for shareholders. We will continue our efforts to improve our processes and procedures. We will stay focused on the transformational goals laid out in our strategic plan and follow through with our new product launches and portfolio optimization.

Q: How do you plan to differentiate yourself from others in this competitive market?

A: The Middle East and Africa (MEA) is the only region within the industry that is forecasting double digit growth in the next five years. The industry is entering a period of significant change, which brings with it a host of opportunities and challenges.

At Julphar, we firmly believe that technology is the biggest differentiator in our industry and it is what ultimately separates the leaders from the followers. We deliver affordable healthcare solutions and our products are used by billions every year.

Last year, we forged new partnerships to launch products in different therapeutic areas. We completed a deal with Dutch company, PharmaMatch BV, to launch a novel combination for the treatment of hypercholesterolemia, which is currently unavailable in the UAE market.

We added to our diabetes portfolio by partnering with industry leaders DEXCOM and Becton Dickinson. We also signed agreements with medical technology company Valeritas and Silicon Valley digital technology company inui Health, to bring their V-Go Wearable Insulin Delivery device and smartphone-enabled home testing platform to the region, respectively.

Write to Paromita Dey at paromita.d@argaamplus.com