After finding success locally, Jordanian skincare company Pella Pharmaceuticals is now aiming to expand further into foreign markets with its Derma product line.
By Rebecca Irvine
The pharmaceutical industry in Jordan is a strong one. You only need to look at FTSE-listed companies such as Hikma Pharmaceuticals for evidence. Despite this, Pella Pharmaceuticals was founded in 2011 to exploit what they believe was an opportune niche in the market: topical dermatological products. “The main thing is that we are focused,” said Pella CEO Abeer Obeidat.
The company produces a wide range of creams, gels, specialized foaming moisturizers, and other topical options. “We believe that it’s good to be focused even though it’s a smaller market. It’s a niche market and we have a chance there,” she added.
In this way, Derma does occupy quite a unique space. The now 60-strong company was created by a team of pharmacists, dermatologists, and doctors who invested in its vision, including Obeidat’s dermatologist husband. With its steady focus on skin products, the company has been able to grow within its sector. Resisting the temptation to expand into other, possibly lucrative areas has ensured that the company maintains this aspect of its brand.
The products are both cosmetic and pharmaceutical, with the latter range including both over-the-counter and prescription only products. Cosmetics in this sense refer to the company’s extensive range of moisturizers, facial products, insect repellents, sun creams, and more, while pharmaceutical products are those which treat specific conditions. The lines run parallel within the company’s business plan, but regulatory differences mean that currently there has been more traction in the cosmetic side of things. While the regulations on the production of pharmaceutical products are stringent, on the cosmetic front there is slightly more room to maneuver.
“What made us first create the cosmetic line was the regulatory process,” Obeidat explained. In order to generate more short-term sales, Derma branched into cosmetics soon after its launch, finding the process faster and easier to get approvals for. In contrast, pharmaceutical products in their very nature take longer to produce and gain allowance for. Though the company does not find and produce their own molecules to form the active ingredients of the products, the time it takes to design, produce, and sell anything medicinal is much greater.
Despite the relative regulatory ease in the cosmetic half of the business, Obeidat says the company is careful to ensure the same standards across all lines. “We use the same process, very high quality materials, a highly regulated self-imposed technical process—this is not always the case [with other companies], but it’s what we do,” Obeidat said.
One of the most striking dimensions of the brand’s identity is its uniquely stylized packaging and design. The font used in the company’s logo was specially created to resemble a skin cell and hair follicle—a clear reference to the company’s pharmaceutical and dermatological roots. The packaging also carries a delicate “oriental” design, according to Obeidat, and was designed with “appeal in mind.”
The specialized foam products that the company produces in its cosmetic range are a relatively new innovation in the sector, and for Derma this so far includes moisturizers and sun creams. In the future however, they are keen to include this inventive formulation in their pharmaceutical range: “[The foam] has several advantages such as being quickly absorbed, and allowing you to use a lower concentration of some potent drugs to get the same effect, because the foam is a more effective vehicle for delivering the drug. It means there are fewer side effects,” Obeidat explained. Though the company’s other products are produced in Jordan, for now the trickier foam products are outsourced to a Swedish company, something that the company hopes to soon change and bring in house too.
This drive to continually create exciting new products for its customers is one that permeates Derma throughout. It has a customer-driven approach to its line development, as the marketing team researches the consumer mood for new products, and ensures that the company develops them. Since the generic products that Derma focuses on don’t need much investment in their development—after all the clinical testing and thorough research have already been done when they were first created—this means the company’s biggest expense is its marketing.
The region, and beyond
Though Jordanian in its origins the company has consistently had a very regional, if not global, outlook. Within Jordan itself the products are stocked nationally in pharmacies across the Kingdom, but a large proportion of the products are exported—85 according to Obeidat. This is something that has been built in the business model since the start, after the company recognized the relatively small size of the Jordanian market. “Since the very beginning we have been exporting our products,” she explained.
It is in fact a feature of the region itself: its lack of availability of many skincare options that prompted the company’s foundation five years ago. “For certain reasons the international companies who originated the first products didn’t develop them in our region so we saw the opportunity there,” Obeidat said. In exploiting these gaps in the regional market, the company has been able to develop a strong regional base, with markets across the Middle East and North Africa including Algeria, Lebanon, and Saudi Arabia. As per the production regulation, it is easier to sell cosmetic products, which means in some cases just that line is sold—though progress on that front is being made.
“We recently had a delegation from the GCC health council and gained approval to register our drugs there,” Obeidat said, in reference to the pharmaceutical products. This marks a positive step forward for a company that has found in the present regional context some of its previous markets are off limits for now. “Yemen and Syria were good markets but the instability has stopped that,” Obeidat said, adding that the situation has been limiting on the company’s reach and turnover.
Happily though, the progress made in the successful deal with the GCC is reflected in other, global markets too. Recent agreements have been signed with Kenya and Ethiopia, and talks are in place to find distributors in this new area. This expansion to the African market is just the beginning though, and early in 2016 10 Derma products were successfully registered with the EU, receiving the notification that will allow them to be sold within all EU states.
Obeidat is relishing this potential for new expansion and has her sights set even further afield, with the company currently researching the options to enter the US market. “We participate in trade delegations wherever possible—it’s a really effective way of making trade partnerships,” she noted. The company hopes to soon apply to the American FDA for permission to distribute both its lines within this huge market.
The potential for growth in the future then is certainly there. Derma’s present turnover is around $5 million—though this has been dented by its regional struggles. Pharmaceuticals are where the company sees the biggest potential for growth and is continuing to drive this line, alongside its successful cosmetics.
Though their competition is stiffer abroad—and Obeidat concedes that within Jordan their dermatological niche is relatively unchallenged—she hopes to be able to carve out an international market for them. “It can help to be a small company under the radar that doesn’t constitute a direct threat to the big companies—it gives us room to grow,” she explained. “I always say ‘we are a small company with high hopes.’”