NBK Capital Partners, an alternative investment firm owned by Kuwait’s biggest lender, acquired Polymedic, a generic drugmaker based in Morocco, as it looks to expand within the Mena region's pharmaceutical market.
The firm now owns a majority stake in Polymedic, along with Jordan-based private equity fund Foursan Capital Partners II. Polymedic’s chief executive Dr. Mohamed Houbachi will continue to hold a stake in the company but one of the company’s earlier investors – private equity firm AfricInvest will exit the company, NBK Capital said in a statement on Monday.
The value of the deal was not disclosed.
“This acquisition is very exciting for NBK Capital Partners, as it allows us to grow our presence in a sector that is buoyed by positive developments,” said managing director Yaser Moustafa.
NBK Capital Partners said its investment was in line with the growth of the generic drug manufacturing business in the region, with the overall Mena pharmaceutical market set to grow at 6 per cent per year over the next five years.
Generic drugs are biologically equivalent to branded drugs but are much cheaper, helping to reduce the cost of essential medicines.
The market share of generics within the Gulf has been increasing, thanks to regulations encouraging their production locally. Abu Dhabi’s Department of Health issued a mandate in 2018 to begin dispensing generic medicines through its pharmacies to provide better value for money for the healthcare system.
It set up a price mechanism where generic drugs in established categories would would also be covered under health insurance policies, with patients opting for branded medicines required to pay the price difference.
Such steps could provide significant cost savings. According to Oxford Business Group, a switch from branded drugs to generic medicines could cut costs by as much as 60 per cent in the UAE.