In sickness and in wealth

World Entrepreneur of the Year nominee Samih Darwazah on the drugs industry.
In sickness and in wealth
By Alicia Buller
Sat 07 Jun 2008 04:00 AM

Under the glittering lights of Ernst and Young's World Entrepreneur of the Year Awards, Samih Darwazah cuts a tiny figure. At 77-years-old, the Middle East nominee and founder of billion-dollar pharmaceuticals firm Hikma is one of the oldest entrepreneurs at the Monte Carlo event. Alicia Buller reports.

Flanked by several family members who also work for the company, the Palestinian shrugs his shoulders when asked what he thinks his chances are of winning: "I have a one in 48 chance," he says of his 47 competitors, showing just a glimpse of the level-headedness that helped him to mastermind a 4000-employee medical empire.

The Jordan-based chairman didn't win the award, but he's also no loser. He's the first ever Middle East contender for the mantle and a man who has undoubtedly helped to shape the world of pharmaceuticals for the better. "What I did was unique compared to the others," he says.

My passion was manufacturing; making things. And I had a singular vision. I didn’t think about the money, that was a side effect and that came later.

At 47 years of age the chairman kicked off his entrepreneurial career relatively late, but what drove him, he says, is his desire to "create an industry".

In the 1970s Jordan was unaccustomed to big business pharmaceuticals but Darwazah single-handedly changed all that, working flat out to ensure Hikma became the first Food and Drugs Association (FDA)-compliant medical firm in the country.

Twenty years on, Hikma Pharmaceuticals became the first Arab company to export pharmaceutical products to the US and has offices in Jordan, Saudi Arabia, Algeria, Portugal, Italy and Germany. It wasn't easy.

"I didn't know what an entrepreneur was at that time; I just wanted to create an industry, so I collected money from family and friends. Every entrepreneur needs to be independent - he doesn't depend on anyone.

He makes his own decisions and has a clear vision - he doesn't choose the easy decisions," the chairman says.

So Darwazah went to America in search of trained Jordanian pharmaceutical talent and lured them back to their home country - 30 employees in total, to start with.

But he says he couldn't have masterminded the continued success of the company without the firm support of Jordan's "progressive, flexible and stable" government.

"I explained my problems and they would usually listen," he says, offering a glimpse into his national standing.

Today the pharmaceutical firm's sales have grown by over 35% annually, attributed to increased market share in the Middle East region and gains in the 'injectables' business.

But continued pricing pressure in the US has led to a significant decline in its gross margins abroad. Still, Darwazah remains optimistic.

"If anything, the American recession will be good for us, because they will look outside for cheaper products," he says. "Plus, generally the world is getting richer which is good; the better standards that they have, the more medicines that they need."

Darwazah says that the ‘generic' pharmaceutical industry is doing well, but developers of new molecular medicines are faring badly.

"The developers can create something new, but as soon as it's off-patent, everyone else starts producing it more cheaply. What my firm does, is examine the new medicines as early as we can, and get ready to launch on the date of the patent's expiry."

With sales of over US$1bn annually in 60 countries, it's been a busy few years for Hikma. In 2005, the company was publicly listed on the London Stock Exchange, followed a year later by its listing on the Dubai International Financial Exchange.The firm has swallowed up the bulk of its Jordanian competitors, as well as acquiring German and Egyptian companies, over the last two years. "I had a clear vision of what I wanted and how to get there," explains Darwazah.

Has the global economic slowdown affected his business? "Not really," he says, "and anyway it [the recession] was much worse in 1989.

I am meeting competition everywhere in the world, including Germany and the US, but I thrive on it. And now it's much easier to find qualified people in Jordan."

Hikma has so far managed to quadruple its business every four years, and - evidencing his view that "entrepreneurs should take risks" - the chairman says calmly "we have promised our shareholders this".

Darwazah is still sprightly for his age, and there's little sign of stress on his face. The secret, he says, is to follow your dreams. "My passion was manufacturing; making things. And I had a singular vision. I didn't think about the money, that was a side effect and that came later."

The chairman is a great believer in supporting the entrepreneurial spirit, and he hopes to channel this energy to revitalise his home country.

Perhaps this mindset stems from his own background: Darwazah himself was the recipient of American education grants in the Middle East, going on to study at the St. Louis College of Pharmacy, Missouri.

Entrepreneurs are important for the Middle East, he says. So much so that Hikma has recently set up a US$500,000 fund to actively discover and support budding home-grown talent. The health firm is also starting up a pharmacy training centre for science graduates.

"The students will be able get the Good Manufacturing Practice certification, so they'll be able to work anywhere in the world," says Darwazah.

Though the chairman failed to clinch the worldwide Ernst and Young entrepreneur award this year, it's clear that within his home region he is making a tangible and powerful difference to real lives everyday.

President of a billion-dollar multinational; winner of the Ernst and Young Entrepreneur of the Year Middle East award; author; ex-government minister - the accolades for Darwazah are mounting up.

And if anyone is the regional epitome of what Jim Turley, CEO of Ernst & Young, describes as the defining spirit of an entrepreneur - "the most important quality is that they never give up, they overcome all the barriers that are put in their way, they are positive, persistent individuals" - it's this humble chairman of Hikma.

Hikma timeline

1978- Hikma was established in Jordan. The firm began manufacturing branded generics and patented under licence products for the Middle East.

1990- Hikma Farmaceutica established in Portugal for the manufacture of injectable pharmaceutical products.

1991- Westward (US) acquired. Westward became fully FDA compliant in 1994.

1992- Hikma Chemicals established in Jordan. Hikma started exporting branded generics into Eastern Europe.

1996- Hikma Jordan facility passed FDA inspection.

1999- Started operations at Jazeera Pharmaceutical Industries in Saudi Arabia.

2001- Hikma Portugal facility passed FDA inspection. Hikma Jordan received its first MHRA approval to sell some products in the UK.

2004- Acquired majority interest in Clinical Pharma Research Lab.

2005- Became a public company listed on the London Stock Exchange. Acquired Instituto in Italy.

2006- Acquired Jazeera Pharmaceuticals in KSA. Listed on the Dubai International Financial Exchange.

2007- Acquired: Ribosepharm in Germany; Thymoogran; Alkan Pharma (Egypt) and APM, the third largest pharmaceutical manufacturer in Jordan.

For all the latest health tips & news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.