Hikma Pharmaceuticals plans to inject $30 million into digital health startups through a new global investment fund.
By Rebecca Irvine
Until March Hikma was a FTSE100 listed company, and remains the biggest pharmaceutical company in the Middle East. Now making a foray into venture capitalism, the company has established a $30 million strategic fund to invest in digital health startups.
Lana Ghanem, the managing director of the Hikma Ventures fund, said it will supplement the research and development of the main company, while providing an opportunity to enter booming new markets.
Why did you launch the Hikma Ventures fund?
I noticed that our R&D expenditure was 3 percent compared to an industry average of 6 percent. I was reading a lot of articles about financial institutions and pharma companies that were coming up with corporate venture capital arms to supplement their own business lines. I proposed the idea to the CEO and he told me to work on this with one of Hikma’s board members, Ali al-Husry. Ali put me in touch with Omar Sati, managing director of DASH Ventures, which is a tech VC in the Middle East and North Africa. We realized digital health is picking up—it’s a necessity now, it’s no longer a luxury or an add-on. You need it now to advance or stay competitive. We put together a proposal to the board and I presented it in August 2015. It got approved and we decided to allocate $30 million to invest in startups in the digital health space.
What will the fund invest in exactly?
Given that we are a small team, we decided to initially focus on digital medical devices, wearables, big data analytics, mobile apps, and healthcare marketing platforms. In terms of therapeutic areas, we consider areas that are currently strategic for Hikma: diabetes, cardio vascular problems, obesity, respiratory products, oncology, and consumer health. We will also use Hikma Ventures as an intelligence-gathering unit to see what’s out there, and then feed the information back into sales and marketing and the R&D teams. One area we’re seeing a lot of traction in and that we only have a handful of products in is mental health. It’s a very interesting area globally and it’s the hot area in digital health these days. We’re about to make our first investment and will hopefully announce it by July. It’s a startup in the United States within the consumer health space.
Do you have a regional or global focus?
The short answer is that we’re geographically agnostic. We’re also currently looking at a Jordanian company that we think has a lot of synergies with Hikma. The way we look at global companies is how can we bring this product or service to the Middle East and North Africa to expedite their growth and open up a new market. For companies in the Middle East we also look at how we can leverage our global network to leverage their growth internationally, or use our internal teams to build different business lines.