ADQ expands healthcare and pharma portfolio with two strategic investments

The Abu Dhabi holding company will acquire Pharmax Pharmaceuticals and invest in Biocon Biologics

Abu Dhabi Skyline (Victor Besa / The National)

ADQ, Abu Dhabi’s state holding company, is set to acquire Pharmax Pharmaceuticals, a UAE-based generic drugs manufacturer, and will take a minority stake in India's Biocon Biologics.

The two strategic investments will expand ADQ’s healthcare and pharmaceutical holdings, as it continues to diversify its portfolio with investments across non-oil sectors, it said in a statement on Thursday.

The acquisition of Pharmax, which manufactures and markets affordable drugs, will help address a shortage of cost-effective medication. ADQ's equity investment in Bangalore-based Biocon Biologics, a subsidiary of pharma giant Biocon, will boost expertise in high-quality biosimilars to target chronic conditions such as diabetes, oncology and immunology, ADQ said.

Biosimilars are not new drugs, but low-cost copies of drugs that have been used to treat many diseases and conditions.

“We are well on our way to building a supply chain that ensures greater accessibility of healthcare and pharma products and supplies for the people of Abu Dhabi and beyond,” Mohamed Hassan Alsuwaidi, chief executive of ADQ, said.

“As a local producer of generic medication, Pharmax will provide us with a high-quality facility, deep sector knowledge and strong relationships for growing pharma manufacturing in the UAE.”

Mr Alsuwaidi added that Biocon Biologics’ research and development track record, manufacturing scale and commercial partnerships would provide ADQ “with an opportunity to benefit from the biosimilar sector that is set to grow, as patents of originator biologics expire and patients demand lower-priced drugs globally”.

ADQ's move to expand its healthcare and pharma portfolio comes amid the worsening Covid-19 pandemic that has put unprecedented pressure on regional and global healthcare systems. The Covid-19 crisis has led to the rapid acceleration in efforts to find solutions in the areas of diagnostics and pharmaceuticals.

Both transactions are subject to customary closing conditions, including regulatory approvals, ADQ said without giving financial details of the deals.

With the completion of of both deals, ADQ investments will cover the entire spectrum of healthcare and pharma value chain. ADQ portfolio covers patient care through Abu Dhabi Health Services Company or Seha, laboratory testing services through Union71 and reimbursement through National Health Insurance Company, or Daman.

ADQ’s portfolio also extends to pharmaceutical procurement, handling and logistics with its ownership of Rafed, Abu Dhabi Ports and Abu Dhabi Airport Company as well as its investment in Aramex.

“We established Pharmax with the belief that patients all over the world deserve access to affordable [and] effective medications,” Madhukar Tanna, chief executive of Pharmax, said.

“Joining forces with ADQ will allow us to increase the availability of locally manufactured, quality, affordable generic and complex drugs. At the same time, we will have greater opportunities to increase availability of pharmaceuticals in the UAE while further expanding our distribution in the region.”

Pharmax specialises in manufacturing drugs in areas such as cardiology, diabetes, gastroenterology and neurology. Launched in April 2020, the company’s UAE facility has installed production capacity of more than 250 million tablets and 85 million capsules annually.

“We welcome ADQ as our investment partner as we pursue our shared goal of expanding access to high-quality affordable biopharmaceuticals to patients across the globe,” Kiran Mazumdar-Shaw, executive chairperson of Biocon, said.

ADQ, set up in 2018, holds government stakes in companies spanning key sectors of Abu Dhabi’s non-oil economy, including utilities, tourism and hospitality, aviation, transport, logistics, industrial, real estate, media, healthcare, financial services and agri-foods.