What is the scope of operations ofÂ AJ Pharma Holding?
KHAN: AJ Pharma is an initiative of the Aljomaih Group of Saudi Arabia, which is a very old group established in the 1930s, and one of the top ten conglomerates in Saudi Arabia today, with a local revenue of about $3bn in Saudi Arabia. AJ Pharma was created to invest into the domain of healthcare and the first investment was in Malaysia, which has set up the first ever formulation fill and finish facility for vaccines in Malaysia. That was an unmet need in the Malaysian territory because they still have no vaccine facility.
It's very useful for the local community to have vaccines produced locally, and secondly, also for the regulatory bodies, because despite being a very important country in the region, it's not yet WHO pre-qualified because there's no facility there. So that is the first initiative, and the facility is in the design phase now, it should be completed by the end of 2016, and the first commercial batches should be out in 2017.
So we already have technological agreements with international companies, and we're also embarking on co-development of new vaccines, especially those which are not being developed in the West. But these diseases exist in the Asian region, like HFMD, which is Hand, Foot, and Mouth Disease. At the moment in Asia, only China is producing vaccinations for it. So we're trying to co-develop a newer version of HFMD with one of our technology partners and bring it to the Malaysian market and have IP sharing.
What kinds of investment is AJ Pharma making into Malaysia?
KHAN: It's a phased investment initially. I'm talking only of the vaccines; I'm not talking about the other projects in the pipeline. Phased because the development of vaccines is a very long process. So if you start with the basic manufacturing right from the beginning, you're looking at a period of something like ten years to thirteen years. So we're starting at the far end with the downstream industry first and then we will do a backward integration. So the first phase is about $100m, but when we go to complete phases, it could be anywhere between $250m to $300m.
What implications will this kind of investment have for the Malaysian economy?
KHAN: Actually, these days, we are talking of bio-economy and vaccines are an integral part of developing a bio-economy. That's point number one, which is the economic side of it. Malaysia is fully dependent on imports. 100% percent of the vaccines used in Malaysia are imported. So when you produce locally, you're basically reducing the import bill and it will definitely have a positive impact on the trade gap in the biologics. You know, for imports and exports, we are limiting our facility to a capacity of 25% only for Malaysia, 75% will be exported, so it will have dual impact.
Number one, there will be a straight reduction in the imports. Secondly, you will increase the exports so you have a pull and push effect both ways on the economic parameters. On the other side, it will create new jobs, it will have a direct impact on the GNI. There will be a human resource impact because, at the moment, the industry is non-existent, so we have to get foreign experts into the country. That means the local population will be trained in a field in which they do not have the expertise today.
Then, the most important fact is the social impact because once the vaccines are produced locally, you're moving the country toward self-reliance in a very important aspect. You would remember that when we had the flu epidemic, there were shortages all over because the countries would like to use it for their own country before they export it to the others. So there was a lag time. So you have a direct economic impact in terms of health economy because you increase the cost burden of disease, the outcomes are more expensive, and the absenteeism from work goes up which has a direct impact on the economy.
So it's a multitude of factors which play a role. We are very proud we're not only going to contribute in terms of investment as the primary economist would look at that, that the money's coming in and the money's generated, but we're also contributing at the community level. We're also moving the country towards self-reliance in the very important health segment, which is disease prevention.
What is halal vaccination?
KHAN: Let me first try to clarify something in a very candid manner. Talking about halal vaccines does not mean that all of the vaccines are haram. That's the first notion we get. Ah, it's halal, that means everything else is forbidden. We have to keep in mind that halal is an Arabic word which means permissible. Haram is an Arabic word which means forbidden. But when we draw a big aura around it, we basically marginalize certain communities into a corner and stigmatize another part of the population.
We are trying to see what the gaps are, medically speaking, scientifically speaking, within the disease prevention domain.
So when we talk of halal vaccines, we are talking of a basic fact. There are pockets of communities, which are resistant to take their vaccines if it has a porcine component in it. So we are not looking at replacing all the vaccines. We are looking at serving those people who are under-immunized, and it is another option for people to choose from. So I will like to reiterate once again: talking of halal does not mean that we should not be using the others.
The prime goal of immunization is to prevent disease and to save lives, and that should not be compromised in any way. Secondly, the halal vaccines in no way would be inferior to the existing vaccines. They should be a step forward. So then they could be adopted on medical grounds, even in communities which are not Muslim communities.
So two key points: one, we are in no way trying to jeopardize the current situation of immunization. We would like that the immunization goals should be achieved in even a better manner with the halal vaccines. Secondly, halal vaccines should be good medical tools to prevent disease and not just to cater to the social aspect of it. It should be a step forward even in the medical aspect of the vaccines.
What are the long-termÂ goals for AJ Pharma?
KHAN:Â AJ Pharma is the holding entity, the vaccine facility is a subsidiary called AJ Biologics. So we would like to see AJ Biologics as a global player in the next 25 years, and that's being very realistic. I don't say five years or seven years because the development and sustainability of any industry is based on research and development. That's the goal we have in mind, and as I told you earlier, we are already getting into co-development of new vaccines coming in. But we are not going to stop there.
We are trying to see what the gaps are, medically speaking, scientifically speaking, within the disease prevention domain because the first step is only the prevention; we are talking of preventive vaccines. We also want to move forward into the therapeutic version of vaccines. So we would not like it limited to Malaysia or ASEAN, we're also looking at possible acquisitions. It could be in Europe, it could be anywhere else, but unfortunately in vaccination and the vaccine industry, the targets are very limited.
But we're looking out for it and we have some interests already there. So the growth will be dependent on the development of vaccines, development of new vaccines, and investing into the halal vaccines. We already have identified two candidates, which could be on the market before 2020, which is very quick. We're also looking at being a sort of initiator for those demands which are ignored.
We don't want to have a situation like ebola coming up in ten years' time because nobody thought of ebola, that's why you still have no vaccine. Even if they accelerate it, you'll not have it before 2016, and I don't know how many people would have died by then. So we have a responsibility to the people. We have to identify what is being ignored by others and see what could be the possible threat in the coming years. It's not easy to do, but I tell you, that's a very noble goal because it's for the sake of humanity and for the sake of the communities.