Saudi Arabia: is the country set to become a global biotech hub?

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Saudi Arabia biotech

Saudi Arabia seems set to become a global competitive biotech hub; over the next decade, it is expected to become a world leader in biotech research and generate significant economic growth. 

A recent report by Strategy& Middle East, part of the PwC network, entitled “Accelerating Saudi Arabia’s Biotechnology Sector”, suggested that Saudi Arabia has the potential to become a global hub for biotech research, development, and pharmaceutical manufacturing, driving economic diversity, as well as addressing national healthcare and food security. 

“The current state of the Saudi Arabian biotech industry could be described as ‘nascent’, if the term ‘industry’ is simply viewed by its narrowest definition as private sector enterprise. Rather, in the context of its economic transformation program, the Kingdom has focused on creating a suitable environment for the evolution of a broader biotech sector, with a productive interplay between public and semi-public institutions, and the first initiatives of private companies in the field,” commented Claudia Palme, senior executive adviser, and Irfan Merali, principal, with Strategy& Middle East. 

“Specifically, there have been, and continue to be, several efforts to establish the essential prerequisites of any science and talent-based sector. This includes establishing renowned academic institutions and structures of research funding, the development of state-of-the-art infrastructure serving biotech fields, supporting students and researchers in their academic careers, and the systematic review of regulations in relation to biotech and the business climate in general.”

Furthermore, according to Sandeep Sinha, head of healthcare and life sciences at JLL MEA, Saudi Arabia’s Vision 2030 initiative – which is a government program that was launched with the aim of achieving the goal of increased diversification economically, socially, and culturally, and reducing dependency on oil revenues – puts a strategic emphasis on fostering high-tech industries through localized manufacturing and private sector investment, with the government’s commitment to bolstering the life science sector extremely evident.

The promise of Saudi Arabia’s biotech sector 

Saudi Arabia has already seen $3.9 billion in investment in R&D since 2021, and boasts several institutions focused on science and technology, such as KAUST (King Abdullah University of Science and Technology), KSU (King Saudi University), KACST (King Abdulaziz City of Science and Technology), King Abdullah Institute of Medical Research (KAIMRC) and King Faisal Specialist Hospital and Research Center. (KFSHRC). 

Furthermore, according to Palme and Merali, the country is also establishing a new hub for scientific and commercial activities in NEOM – the Kingdom’s ‘city of the future’ – and KAIMRC and KFSHRC connect their research centers with their own top care hospitals, serving the larger Middle East region. This allows researchers to have access to “a reservoir” of patients and practicians for clinical trials. 

Plus, innovation initiatives like the Saudi Human Genome Program and the Saudi Network for Clinical Trials are also helping clinician-researchers, as well as commercializing potential new technologies.

Some of the aforementioned institutions have also made extensive investments in infrastructure. “These institutions offer substantial state-of-the art infrastructure with spacious labs. They are equipped with standard lab equipment to sequencers, and even a batch-size manufacturing line in KACST; a stark contrast from the often-squeezed spaces in Boston, Munich or other global hubs. They also train a generation of new scientists from one of the youngest national populations globally,” explained Palme and Merali. 

They also pointed out that Saudi Arabia is entering the global biotech stage at a time when multiple factors are working in its favor. 

For example, the current focus on genomics and cell and gene therapy (CGT) in medical research happens to align with the Kingdom’s genetic make-up and high incidence of genetic diseases. This creates a need in the country for players in CRISPR and similar technologies.

Meanwhile, the negative impact of climate change is another factor that necessitates arid climate agriculture, which is currently being pursued in Saudi Arabia. 

“Additionally, Aramco’s status as the world’s largest company provides the Kingdom with a unique opportunity to drive industrial biotech applications, as well as utilize its expertise in addition to SABIC (a chemical manufacturing company) to launch new products in fuel, energy and materials markets,” continued Palme and Merali.

“Traditional biotech markets are also grappling with a scarcity of talent, requiring the exploration of new talent pools. The downturn in capital markets over the past year also enables the Kingdom to acquire strategic technology platforms and product pipelines for its industry at the best of conditions.” 

And, finally, stated Palme and Merali, the geopolitical shift of powers like China and India away from Western markets and partners has increased their interest and activity in Saudi Arabia, opening up more partnership opportunities for the Kingdom.

“In our perspective, Saudi Arabia has a unique opportunity to leverage this current set of conditions to create a major footprint in biotech in record time. Of course, this will still require getting things done and getting them right, but the odds are in their favor.”

Claudia Palme, senior executive adviser, and Irfan Merali, principal, with Strategy& Middle East

Four key enablers 

In its report, Strategy& Middle East laid out the efforts needed in Saudi Arabia to spark and accelerate entrepreneurial activity and commercial investment into biotech, citing four critical factors for this – or four ‘enablers’. 

The first enabler involves securing public and private funding in the industry. “…Beyond research grants, this is especially the establishment of venture capital funding by setting up local (state-backed) funds and attracting international Biotech VCs to set up in the country and support these new funds and local start-ups,” explained Palme and Merali.

The second enabler is to expand human capital and the talent pipeline, which, starting from primary school, encompasses a comprehensive focus on STEM disciplines, continued with biotech-relevant enrichment for talented individuals, revamped university curricula, new degree programs, etc. According to Palme and Merali, this will help to create a talent pool for local and international players.

Third on the list is the continued development of state-of-the-art infrastructure, including digital resources and tools such as AI.

And, finally, the fourth enabler, is the creation of a strong framework of regulation and incentives: “While already on-going, this regulatory ecosystem for the biotech industry will need continued flexibility and innovation to keep pace with scientific development, as well as the intense global competition to attract biotech ventures,” commented Palme and Merali.

“We believe that Saudi Arabia has a unique opportunity to make biotechnology a cornerstone of its post-oil economy, if these four elements can be put into place.”

Challenges lie ahead

Of course, as with any country that is looking to emerge as a world leader in biotech research, certain challenges lie ahead; ones that go beyond simply trying to succeed at putting the ‘four enablers’ into practice. 

“…The relatively higher capital requirements for establishing manufacturing facilities could be a possible deterrent to potential investors, when compared to other regions like APAC. The integration of Saudization requirements, aimed at enhancing the local workforce, presents a transitional hurdle in terms of skill availability and efficient implementation.” said Sinha.

“Moreover, the success of joint ventures hinges on navigating licensing agreements between parties and government agencies, alongside concerns surrounding the maturity of intellectual property rights. These factors could potentially impact the nation’s pursuit of self-sufficiency in the life sciences sector.”

But, said Sinha, nothing takes away from the fact that the life sciences/biotech industry in Saudi Arabia holds vast growth potential, and is certainly poised to become one of the key hubs in the MENA (Middle East/NorthAfrica) region in the next decade. 

And, as mentioned previously, with certain factors currently working in its favor, and if it can put the key ‘enablers’ into action, Saudi Arabia has a great opportunity to overcome these challenges and really become a world-leader in biotech research. 

“In our perspective, Saudi Arabia has a unique opportunity to leverage this current set of conditions to create a major footprint in biotech in record time. Of course, this will still require getting things done and getting them right, but the odds are in their favor,” stated Palme and Merali.

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