US biotech manufacturer seeks Gulf genomics partners

Reuters/Stringer

• ProPhase Labs in talks with UAE and Saudi companies
• Genomics studies genetic makeup
• Biotech company to sell esophageal cancer tests

US biotech company ProPhase Labs is in talks with prospective partners in the UAE and Saudi Arabia.

ProPhase Labs, which is listed on Nasdaq, has appointed two advisers: investment bank ThinkEquity and Al Ramz Corporation, a capital markets financial institution in Abu Dhabi.

Discussions with potential partners in Dubai, Abu Dhabi and Saudi Arabia are ongoing and “very positive”, Ted Karkus, CEO of ProPhase Labs, told AGBI.

“We’ve been back a couple of times now and our investment bankers are following up,” he said.

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A focus for ProPhase Labs’ GCC expansion plan is its Nebula Genomics division, which offers a data repository with whole-genome sequencing specimens from over 140 countries.

Genomic medicine is the study of an individual’s genetic makeup to identify the cause of their condition or predisposition, and improve diagnosis and treatment.

Karkus said the UAE and Saudi Arabia were ideal expansion targets because they had already embraced the potential of genomics.

The Emirates Genome Council was established in 2021 and in May this year it launched a National Genome Strategy, providing a framework of legislation to support genomic programmes over the next decade.

In Saudi Arabia the Genome Programme is one of the frontier national projects under Vision 2030.

The kingdom has the potential to become a world-leading centre for biotech research, development and pharmaceutical manufacturing, according to research from consultancy Strategy&.

Abu Dhabi is also seeking to establish itself in the region as a leader in biotech. A number of international firms including AbbVie Biopharmaceutical, BioMap and National Resilience are looking to set up in the emirate.

Saudi Arabia has attracted $3.9 billion in research and development since 2021, with significant investments in flagship biotech R&D institutions. 

“Saudi Arabia has laid a solid foundation for biotech through a series of national investment strategies and a streamlined regulatory framework,” said Claudia Palme, executive adviser with Strategy& Middle East.

ProPhase Labs

Vision 2030

Karkus said the companies it is talking to in both countries “recognise that we have some fantastic technology”.

He added: “In the UAE it’s a high-level objective to improve the healthcare of their citizens. And so they are very interested.

“Collaborations with our investment bankers have opened up numerous in-person negotiations with significant life sciences companies.”

In October Nebula Genomics announced an agreement with Abu Dhabi’s G42 Healthcare to explore collaborative opportunities, including genomic sequencing.

“Given the UAE government’s ambitious vision to revolutionise healthcare through genomics and precision medicine, we believe the insights that our geographically diverse dataset offers aligns perfectly with this goal,” Karkus said.

In the longer term, ProPhase Labs wants to establish a chain of Nebula-branded labs, funded by partners, with an initial focus on the UAE.  

The company is also considering a “white label” version of its whole-genome sequencing kits, branded by a local partner in exchange for a royalty payment and access to the data. 

Karkus said that five years ago it cost a “fortune” to do a test, but prices have fallen to around $300.

“We believe we are destined to become a multi-billion company. The vast majority of people around the world still don’t know anything about this, but we are first in this business which is going to explode,” he said. 

“Our business is growing more than 100 percent year over year and we haven’t even started the B2B business, that’s just direct to consumers online.”

The five divisions of ProPhase Labs, including Nebula Genomics, achieved revenues of $122 million in 2022, up from $79 million in 2021. Net income hit $18 million, up from $6 million. 

ProPhase Labs is also in discussions to introduce esophageal cancer tests to the Middle East.

Karkus said the UAE had witnessed an “alarming rise” in esophageal cancer cases, prompting the UAE government to launch a national screening programme. 

He said preclinical studies were being completed and the company hopes to commercialise it within the next six months.