Your company's subsidiaries include Supersonic Imagine, a company that focuses on ultrasound imaging, and Innomedics, a platform for medical devices. What are some other projects that KLSC is running?
Usually our work here is to educate people on what the life science industry is. Basically, it is any business or product that is concerned with extending the life of living organisms; this obviously includes the healthcare sector. The challenge we are facing is that life science sector in the entire Middle East region is still a very nascent industry. We at KLSC have to be pioneers and build the industry from scratch, which means a lot of our initial focus has been in investing outside of the Middle East, in global markets, such as in Europe and in the US. We have also developed very specific platforms to enable technology transfers into the region and all these companies have been growing at a very fast rate. Today, these companies are mainly based in Dubai and Kuwait, but at the end of the day the focus is to incorporate the entire Middle East region as a part of our mandate. KLSC is primarily a technology transfer company, where we focus on nationalizing the most innovative life science technologies for the Kuwaiti and regional market. We are now also developing a project management and project delivery arm to work with our government on key healthcare projects such as Jaber Hospital. We have platform companies where we own a majority stake or have had a very strong role in the company. These are five major platforms; one of them is the Life Sciences Academy (LSA). It is actually the first ever life science and healthcare focused academy in the GCC. It offers 80 courses per year for three types of customers: leaders in healthcare—these are the managers and administrators; clinicians in healthcare—these are people who are actively involved in healthcare services such as the doctors nurses and technicians; and last but not least, the most important component of the healthcare sector, the patients. The second company we have invested in since 2011 is ClinArt, which is a Clinical Research Organization (CRO) that provides a one-stop-shop service for running clinical trials for the governments and pharmaceutical companies in the region. There is a global trend whereby multinationals pharmaceutical companies are developing targeted therapies on regional genomes, for example for the Middle East, and to achieve this level of specificity, these companies need to do trials on people from this region. The third company we invested in is Dubai-based NewBridge Pharmaceuticals. This is the company we invested in back in 2010, and is a great example of the venture capital invested here in the Middle East. This company today is projected to deliver USD50 million in sales this year with operations in 20 different countries across Africa, the Middle East, and Turkey. It licenses and distributes medicines that would not be available here in the Middle East otherwise. Our fourth platform investment is a company called Ecore, which used to be called Maskem. It produces the active pharmaceutical ingredients (APIs) that go into the drug manufacturing process. Most companies just take the drug and distribute; however, we are taking it a step further with Ecore. Eventually, our vision for Ecore is to expand its services to be a mixer and a manufacturer of novel pharmaceuticals. Innomedics is our final platform company and is focused on bringing in the latest medical technology and has differentiated itself in the market by also importing and distributing products in consumer health—products that actually impact the consumer directly.
What are the challenges you are facing in the life science segment?
I think the major challenges life science entrepreneurs face are that there needs to be more success stories in terms of exit. There are a lot of entrepreneurs who develop very interesting projects but they do not really focus on the business aspect. We help them to license but they need to start commercializing their ventures full time. In the past, entrepreneurs needed to allocate one year to get a business license, now it thankfully takes one month, but, obviously, we need to aim for it to be as quick as one week like in Dubai or one hour as in Singapore. These are the milestones to keep in mind. In this regard, KLSC has mainly acted as a regional business incubator for companies such as Median in France, whose personalized technologies are being used to treat cancer around the world. We also invested in four different investment funds globally such as Wellington Partners in Munich, New Leaf Venture Partners in New York, and Presidio Partners and Kearney Venture partners, both in San Francisco. These funds have in turn invested in hundreds of life science and digital health companies. This is something that, I believe, we need to continue because that is the best way to get exposure to these new technologies.
Studies show that an extraordinarily high number of Kuwaitis suffer from diabetes and obesity. How does KLSC counteract against these health challenges?
The GCC is globally competitive in three things: oil production, amazing airlines, and obesity. What people do not understand is that when you have obesity, you are very likely to get diabetes. When you have diabetes, you are four times as likely to be hospitalized. And the cost of treating diabetes can run up to $1-2 million per patient a year. What we do through our platforms is we train people about prevention. Other than obesity and diabetes, which are very closely related, the major challenge here in the healthcare system is that we do not really have a data-driven system; there is no single unified medical record today. This is something that we are working on together with the Ministry of Health. We actually are working on developing Jaber Hospital, a 1,168-bed hospital, which would be one of the largest hospitals in the Middle East, to become the first ever paperless or, at least, paper light, hospital in Kuwait. Another project we are working on with the Kuwait Foundation for the Advancement of Sciences is the National Genome Center of Kuwait. This will bring Kuwait to a new era of medicine.
What are your expectations for the upcoming year?
The Kuwaiti healthcare sector is in a very interesting position because it is a sector that affects every single family—it is a sector people experience on a day-to-day basis. Thankfully, there has been a very important development in the way we think about financing the healthcare sector in the long term. Traditionally, what was done in Kuwait and in many other countries in the GCC is that the healthcare sector was directly funded by Ministry of Health budgets supplied by the Ministry of Finance. This model is certainly not sustainable in the long run. There is an initiative by His Excellency the Minister of Health to develop a universal healthcare system here in Kuwait. This law was passed earlier this year and Gulf Insurance Company won the bid to actually develop an insurance program for retired citizens. This category of population is roughly about 110,000 and embraces people as young as 40 in case of early retirement as well as regular retirees; the age of retirement in Kuwait is 65. This category of population will soon no longer be reliant on the Ministry of Finance or the Ministry of Healthcare. This has been the most important development, and it will have a lot of trickle-down effects on the healthcare economy. Eventually, we hope to develop a unified payment system for the sector, whereby public and private healthcare providers can compete on quality not access or price. The private sector remains a very important stakeholder in the way healthcare is delivered, so it must be involved. We only need to look at our neighbors in the region for quick solutions; for example, Abu Dhabi. There is a healthcare council, which includes different stakeholders from both private and public sectors that meet on a regular basis to decide how the healthcare sector in Abu Dhabi is shaped. In the UAE, Abu Dhabi and Dubai both have a universal healthcare system. We need to think about how we can develop a sustainable model for the healthcare economy and I believe that Kuwait can truly become a regional hub for the life sciences and healthcare sector.