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Saudi Arabia injects $133m into vaccine factory

Saudi Arabia plans a vaccine factory Pexels/RF._.studio
Modon says the new Saudi vaccine factory in Sadeer City will improve pharmaceutical security
  • SAR500m facility in Sadeer City
  • To produce vaccines and medicines
  • Pharma worth $19.8bn by 2032

Saudi Arabia is planning to invest SAR500 million ($133 million) in a factory to boost local vaccine and medicine manufacturing capacity as the kingdom seeks to become a regional centre for biotechnology.

Saudi Authority for Industrial Cities and Technology Zones, also known as Modon, has signed an investment agreement with the Vaccine Industrial Company to set up a joint venture factory in Sadeer City.

Modon said the project aims to strengthen the pharmaceutical security system and localise the manufacturing of vaccines in the kingdom.

The 42,000 square metre plant will create around 150 new jobs and aims to boost exports of vaccines such as those for the seasonal flu virus, Covid-19, chickenpox, pneumococcal and meningitis.

Modon attracted private sector money totalling SAR2.8 billion during the second quarter of 2023, up 23 percent compared to the same period in 2022.

The kingdom has dedicated substantial funding for academic research and development, which topped SAR14.5 billion in 2021.

“Solid investments and a streamlined regulatory framework have already laid the foundation; it is time to take targeted initiatives to support the next level of development,” said Dr Walid Tohme, partner, Strategy& Middle East, in a research note.

“Saudi Arabia now needs more private venture funding to help a vibrant biotech ecosystem take hold,” he added.

“Regional private investors, including investment funds, family offices and banks, need further education on biotech investments’ characteristics and risk profile, and how such investments can realise Saudi Arabia’s ambitious Vision 2030.”

Saudi Arabia’s sovereign wealth fund, PIF, is leading from the front with the launch in June of Lifera, a pharmaceutical investment company.

Lifera will make products including insulins, vaccines and plasma therapeutics, PIF said, and will create partnerships with local and international companies to increase local capacity and drive the development of domestic manufacturing.

Analysts at BMI, formerly Fitch Solutions, said they expect pharmaceutical investment in Saudi Arabia to grow strongly.

The Saudi pharmaceutical industry was valued at almost $12 billion last year, according to BMI, and is estimated to grow annually to more than $15 billion in 2027 and almost $20 billion in 2032. 

Several multinational companies have already established a presence in the country, either through direct investment or partnerships with local companies, among them Novartis, Pfizer, Sanofi, Merck and GlaxoSmithKline. 

The government has also implemented regulatory reforms to encourage investment and support the development of the local industry. 

Globally, biotechnology has risen to the top of national agendas in the post-pandemic era. 

In July, Lifera, the French pharma major Sanofi, and Arabio, majority owned by Riyadh-based Tamer Group, said they would set up manufacturing facilities in the kingdom to produce vaccines for Saudi citizens. No details were given on the location of the facilities or total investment. 

Last month, Ted Karkus, CEO of US biotech company ProPhase Labs told AGBI he was in talks with prospective partners in Saudi Arabia and said the kingdom was an ideal expansion target because it had already embraced the potential of genomics.

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