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Exploring new opportunities in the global pharmaceutical sector

Health care and pharmaceuticals are becoming promising investment opportunities globally. (Shutterstock)
Health care and pharmaceuticals are becoming promising investment opportunities globally. (Shutterstock)
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23 Aug 2020 03:08:24 GMT9
23 Aug 2020 03:08:24 GMT9

Global stock market indices have been volatile since the start of the coronavirus pandemic, destabilizing the world in a way not seen since WWII.

There are a few sectors — health care and pharmaceuticals in particular — that are becoming promising investment opportunities globally, especially in the UK, the US, Russia, and China.

Major sovereign wealth funds, including the Saudi Public Investment Fund (PIF) and Russia’s National Wealth Fund, as well as global family offices and institutional investors, are hunting for opportunities in select health care and pharmaceutical companies. It is anticipated that the healthcare and pharma sectors will be among the most attractive to invest in for the next 5 years.

For example, Babylon Healthcare Services Ltd., the fast-growing mobile medical consultation service, has raised $550 million in Series C funding, elevating the company to unicorn status.

The PIF led the round that valued the company at $2 billion with a total of $635 million raised. The new capital will enable the company to expand into more markets, including the US and Asia.

The PIF had already started investing in the local pharma sector before the outbreak of the pandemic through its co-founding of the National Unified Procurement Company for Medical Supplies (NUPCO), a company established to standardize the procurement activities of government health entities in Saudi Arabia. The PIF aims to localize the pharmaceutical industry and the assembly of medical devices and equipment as part of Saudi Arabia’s Vision 2030 reform plan.

The Saudi government is planning to spend $180 billion on health care over the next 5 years, in both traditional and frontier sub-sectors, to meet the country’s public health challenges.

As such, investors will find significant opportunities across the entire sector including the pharmaceuticals field. According to experts, less than 40 percent of pharmaceutical products are manufactured in the country. Saudi Arabia’s pharmaceutical market is expected to be worth around $8 billion, making it the largest in the Middle East.

To be in line with that same mindset, we at BMG Financial Group share the strategic global direction of the PIF and other sovereign wealth funds.

Earlier this year, in cooperation with our Saudi-based partner AcedrA Biopharmaceuticals Company, BMG Financial Group started to shortlist selected fast-growing and promising global biopharmaceutical companies in the UK, France, Germany, and the US.

The more advanced these companies are with their clinical trials and closer to securing their respective food and drug administration approvals, the more attractive they become as an investment opportunity.

Post all regulatory approvals in Saudi Arabia, BMG Financial Group will be offering strategic equity stakes in these companies during Q4 this year with the possibility of being listed on leading stock exchanges, including Tadawul, as an exit strategy, especially if they decide to set up manufacturing facilities in the country.

Basil M.K. Al-Ghalayini is the Chairman and CEO of BMG Financial Group.

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