|Khalid Bin Kalban|
Sanofi has a plant in Saudi Arabia but had decided to expand its production capacity and reach in the Middle East market with an investment in an established company there. The drugmaker is taking control of Globalpharma, a decade-old company that sells products in the Middle East and Gulf Coast markets.
Sanofi ($SNY) is leading an investor group that has acquired a 66% share in the Dubai-based Globalpharma from Dubai Investments, Reuters reports. No terms were provided. The company will be managed by the French drugmaker and will be the vehicle through which it will manufacture its branded generic drugs for the region, Trade Arabia reports.
"The penetration of generic drugs manufacturing, which has historically been low in in the region, is now gradually increasing to European levels," explained Khalid Bin Kalban, Dubai Investments CEO. The investment group will continue to hold the remaining 34% share in the operation.
Formed in 2003, the company already manufacturers a host of products including antibiotics, pain and cardiovascular drugs, treatments for diabetes, as well as vitamins and food supplements, Trade Arabia reports. Its products are approved in 14 countries in the region.
Western drugmakers have targeted the Middle East and Persian Gulf in the last few years since those markets are expected to grow faster than the global average. Some companies are building their own plants, while others have turned to local partners already known in the market.
Jordan-based Hikma is expanding sales in the region while Pfizer ($PFE) is building a plant in Saudi Arabia, expected to come online in 2015 to make a number of the company's drugs. Merck KGaA's Serono division tapped Neopharma, a domestic drugmaker in the United Arab Emirates, as its manufacturing partner and recently started turning out the standard diabetes treatment metformin there. U.S.-based Merck ($MRK) joined a venture to build a $93 million insulin plant in Bahrain, to start production in 2015. AbbVie ($ABBV) in April said it will partner with the Arab Company for Pharmaceutical Products (Arabio) to manufacture arthritis treatment Humira and other drugs in Saudi Arabia.