Great. Thank you all for coming. It's great to have so many guests here. We know it's a long way to come, but I think it's much longer for our team, to be honest, than for the team from London, because what I was really surprised to find out is that I think the Jordan team flew seven and a half hours to get here, and I think on a direct flight, and I think the Saudi flight may have been even longer. So it seems like, oh, come visit us here in Morocco, but actually our team is very spread out across the region. But we're very, very pleased to have you all here today. I think you will really be able to learn a lot about our business over the course of the day. We have the GMs of all of our sites here.
We'll give you, you know, an overview of the branded business. We'll also, you'll also be able to deep dive into our key markets, whether it's through a Q&A session that we'll host or over lunch, the coffee breaks, or dinner. We really feel that this is such an important part of our business. We often get feedback that people don't understand it. They feel it's a bit of a black box, and so we're hoping to open up that box, help you understand the business, and help you realize, you know, how great the opportunities are that we have and the potential of this business, yeah, going forward. How the day will work is, I'm going to pass over to Mazen, who is our Vice Chairman and the President of the MENA region.
And then, he will introduce the rest of the team, and we'll go through a presentation. Then we will have a Q&A panel. So, that will give you a chance to ask questions to the full team. We'll have a coffee break within that, and then we'll have lunch. And then after lunch, we have a presentation on our Moroccan business, and we'll organize everyone into groups, and then we'll head off on a tour. So, when we finish up the tour is probably around 3:30 P.M., chance for one more coffee before you hit the traffic of Casablanca. But we hope you have a great day, and just gonna show a quick video on our business, and then we'll get started.
Good morning again, and welcome to Morocco. Yeah, my name is Tareq Darwazeh. I'm the Chief Operating Officer for the MENA region. I joined Hikma in 2008. I started in sales and marketing as a medical rep. I worked throughout the MENA for three years, and then I joined our business in the U.S. Back then, we were growing in injectables globally, so I worked on the integration of back then the multi-source injectables facility that we acquired from Baxter. I stayed there for three years. Then I came back to the MENA with the mandate of building out the injectables business, and it actually developed into a hospital business. So I got exposure to the MENA throughout that time span. Then I moved into sales and marketing for the branded business.
Then, throughout that, I developed into leading and working directly with Mazen and the rest of the team on the MENA region as a whole, where I manage the P&L for the MENA with Mazen. We work on the strategy, and I work very closely with the team throughout the different markets. I'm very excited today to start off by explaining the MENA to you a bit, and then it's gonna be followed by a strategic explanation of the MENA. We're gonna go over our strategy, and Samer will be presenting that. Following that, we're gonna go over the injectables business to give you a snapshot of how we operate through our global presence, where we bring it more into the MENA, and the presentation will be done by Sherif, who's leading the injectables and hospital business in the region now.
To start out, for the MENA, we have a very unique presence. As Mazen mentioned earlier, Morocco is our last frontier, but we're present across 17 different markets. In every market, we have a different business operating model that caters to the market. We look at our markets based on clusters, and we have a tier model for the market. Our largest markets in terms of tiers are Saudi Arabia, Algeria, and Egypt, and that's based on the potential of the market, on our presence, and as well on how we see the market developing into a growth strategy and a growth phase over the next years. We have our tier two markets where we have a strong presence as well.
We have manufacturing facilities in a lot of our tier two markets, and these are markets where we believe the potential for growth in is higher and we're investing more and more in. Then we move to our smaller markets, which are tier three and tier four markets, where we have different business models to cater for those markets. But it's worth mentioning that in all our markets and in all our tiers, we have boots on the ground. We have strong local teams that work with the regulators, that work with Hikma to bring in new technologies, new therapeutic areas to cater to the market. So we don't have a one-fit model for every market. However, we have a one-stop shop solution in the MENA region as a whole. And it's worth noting that over 40 or around 40% of our business in the MENA is under license.
We bring in a lot of novelty products, a lot of technologies, a lot of specialized products, and we group them with our existing products. When we work with our partners and licensors, we provide a one-stop shop solution for them. We do a lot of tech transfer into our facilities, to the MENA because a lot of MENA markets have a closed system. The sites are actually market access sites where if something is not manufactured locally, it may be banned from importation in certain markets. What we do is we bring in the technology, we tech transfer it, and we start producing the medicines locally in order to grow and develop within the market.
This is why you're gonna see a heavy manufacturing footprint in the MENA, but this is by design, and this is what enables us to grow faster as Hikma and to take a leading position in the market and to shape it. In terms of our ambition today, we have a very strong market presence. We're the second largest player in the MENA. We have a very deep understanding of the local regulatory system, the regional healthcare landscape, and, as Mazen mentioned, and as you will see throughout the presentation, our teams work very closely with regulators on bringing new technologies, a lot of instances where we don't have a landscape in the MENA. For example, for biosimilars, when we started working in biosimilars, there were no regulations for biosimilars. We actually worked with the regulators on having a ground framework for registering biosimilars.
We connected across different authorities in the region due to our position, so this helped us develop the market, and what we did, we not only did increase access to more affordable medication, but we also gave patients different alternatives, and we gave governments and our partners as well more access to medication, which works within our vision and mission. We have excellent customer relationships, we're the trusted partner of choice for regulators, for licensers, and for patients because our strategic initiatives are, and our portfolio is changing to become into more chronic medications. We're delivering more high-value products, more first generics where we add value and we give the patients a faster, a better, second choice. We give them more affordable medications, and we're expanding our offerings more holistically throughout the region, so this is just a quick snapshot in Hikma.
We've grown organically and inorganically, and this shows how we've been growing over the last 45 or 47 years throughout the MENA. We have a lot of manufacturing presence. We work with different companies to bring different innovations and technologies, and we are still looking at different opportunities to grow within the MENA and to build on our footprint because we're very well positioned in the MENA to deliver on more technologies, to deliver on newer products within our current and existing infrastructure since we're present across all of MENA, and this is a very unique position that we're in because we invested early in the MENA, and this is why today we're able to grow and develop further in the MENA because of our extensive footprint throughout the region, and speaking of our footprint today, we're a powerhouse in the region. We operate in 17 different markets.
We have 20 manufacturing plants today as we speak with more to come. We have five R&D centers to support our growth in the region. We have close to 6,000 team members in the MENA where a third of them are boots on the ground, working daily with relationships and interactions with the doctors. So our reach within the region is also very strong, which enables us to promote and build on our products. And just a quick snapshot of the MENA and how we operate today. We're 25% of the group revenue for 2023. We're 21% of the group operating profit. This, the MENA accounts for 32% of the group revenue when we look at branded and injectables. In terms of injectables, we're 7% of the group revenue.
If we were to jump into the MENA, just to go over the holistic picture of the MENA today, the MENA market is at $39.5 billion. 41% of the total MENA sales regionally are coming from generic products where we see a growth in that, and we foresee a very strong growth. The governmental sector contributes to 31% of the total MENA healthcare spend. Post-Arab Spring, this is increasing more and more because governments are looking more for localization. They want safety and security post-COVID. A lot of governments are becoming more wary of their supply chain, so they're promoting local investments for manufacturing. They're also increasing the healthcare spend on more preventative healthcare, more on lifestyle diseases. They're looking more, they're increasing the hospital beds.
As a region, we foresee very strong growth within the region because the dynamics and the life expectancy are increasing in the MENA. It's all working in the favor of the industry in terms of growth, and it's giving very good economic indicators. The non-communicable diseases in the MENA are expected to grow at a higher rate, as mentioned earlier. The aging population in the MENA is also working in terms of improved healthcare standards. The life expectancy is 74 years. It's gone up a few years in the last 10, 15 years. The macroeconomic trends are also showing positive factors for the MENA in terms of growth. As I mentioned, or as you mentioned earlier, today Hikma is the second largest pharma player within the region.
We've gone up three ranks from 2020, and this came due to our portfolio, due to the way we operate in the market, due to our new launches, due to our efficiency in terms of delivering on a model of growth in the market because of our presence, our reach. This all paid off as we grew within the region. So we really understand the region. We know how to operate, and we're investing a lot within the region to grow and develop on it. And this is just a snapshot of our rank in the oral markets. And it's worth noting that over the last couple of years, we've really, really heavily invested in our portfolio, and this is something that's delivering a lot of growth for us now.
Today, most of our prescriptions have shifted more to chronic prescriptions, which are in line with our strategy for growth and development, and it's more consistent business down the road. The way we're thinking has changed drastically over the last 5-10 years in the MENA, and we are seeing that today more and more. We have a very strong track record of expansion and of growth within the region. This is just since we've talked about the past. Now we're talking about the present and the future. We've historically grown at 6% in terms of revenue, compounded annual growth. Today, we're working to increase that to 7%-8%. Our operating profit has also increased from 20% to the mid-20s over the last couple of years in the MENA, and we're looking to maintain that position.
Now I'm gonna call over my colleague Samer Al Ansari, who's our Vice President of Marketing, to join. Thank you.
Thank you, Tareq. Good morning, everyone, and welcome again to Morocco. I'll try in the coming slides just to give you some sort of highlights on our strategy, ambition, and our strategy, how to achieve this ambition, as well as going through the progression that we have in the past years just to show you how things have worked for us in MENA. I start, first of all, with you know, our ambition, and our ambition is very clear.
As mentioned earlier, we need to become the leading pharmaceutical player within MENA, and that's mainly by bringing products that are addressing the unmet needs, the big burden that Tareq mentioned earlier, which is going more and more towards the non-communicable diseases, in an affordable way so that we can increase even the share of patients that can afford such, use such medications. And our strategy of reaching there is based on three core pillars. The first one is having the right product, a robust pipeline, a product that is tailored and is addressing the unmet needs within MENA, a product that is first to market, so we need to register it as soon as possible, and a product that is differentiated so it won't be easy to copy. Then we need, of course, the operational efficiency, the enough supply of this product at a competitive price.
And finally, the most important part in MENA is that we need to reach the right customers with the right message, and that's all related to the value proposition part. So what I'll do in the coming slides, I'll just take you through each and every one of these pillars, and maybe we can show more examples on how this is being done in the past and how we are planning to do it in the future. So let's start first with the robust pipeline. Again, our aim is definitely to match with the needs that are there in the market, with where the burden is coming. And thus, as you can see from the slide, it just resembles to some extent where the non-communicable diseases are going, represented here with chronic diseases within our portfolio. This is a portfolio of different time intervals.
Eight years back, we were at 44% of our chronic diseases where we were an anti-infective company. By 2024 and end of this year, we are expecting to reach around 59% contribution of chronic diseases. And by the next five years, based on our current pipeline, we are expecting to reach even to 63% contributed from, you know, products that are related to chronic diseases. Now I'll go in detail, and I'll just give a more detailed approach to how our pipeline is progressing. And I've selected here three of the core diseases that are really causing the biggest burden in MENA. And I guess they are also presenting some burden at a global level, but let's take them one by one. So I'll take with the lifestyle diseases as the first part.
If you know, the lifestyle diseases is a cluster of diseases related to diabetes, hypertension, hyperlipidemia, as well as obesity. I'll give you an example. When talking about diabetes, at a global setting, the prevalence of diabetes is almost from 7%-9%. In MENA, it reached up to 16%, and in some markets, even exceeding 20%. It's a big burden. Our role, as Mr. Mazen has just mentioned, is that really we need to bring the right medication to our patients and contribute to solving these burdens of such diseases. We were aiming all the time to bring new generations of antidiabetics. In the past, we had a really good deal with Takeda by bringing products like innovative DPP-4s as well as Actos, the TZD, to the MENA market.
Recently, we've launched the third generic dapagliflozin, a class of SGLT-2, if you know this class, which is really a good class because it's giving not just the protection against diabetes, but also against cardiovascular and kidney problems. We are extending on this launch with a combined dapagliflozin and metformin. We were the first so far to launch it in three of our core markets: Saudi Arabia, Jordan, and Iraq. And we are extending on the family itself with launching the empagliflozin as well with its classes. In the midterm, of course, our eyes, like what's going on right now, globally, in the midterm, we are looking for even the GLP-1 group where we need really to fight against obesity, I mean, the cause of all evils. So that's what we have in the midterm view.
With regards to oncology, and let's move now to specialty medicines. Before moving there, of course, there's also the hypertension and hyperlipidemia. And I would say that the market is saturated in a way with the current medications that are there. But we've left that market with candesartan, as well as some valsartans. And recently, we launched the azilsartan, a very unique new ARB in the hypertension arena. And we are moving more and more towards resistant cases with more combinations, but also having an eye on pulmonary hypertension, a unique part of the hypertension that's really making sense for our patients with some products in our pipeline. Dyslipidemia is another big story in MENA where almost we are talking about 50% to some extent of prevalence.
At that moment, we are really doing well with statins, rosuvastatin and atorvastatin, but we are bringing now the combinations there, which is rosuvastatin/ezetimibe that will be launched soon, as well as we are going into new, even generations of, products that can, work with the resistance of statins. Let's move now to the specialty medicines, like oncology, as well as immunology. With oncology, we're the first to bring oral oncology. We have our own first manufacturing site within MENA, that was in Jordan, for oral oncology. We started with, hematologic malignancies, mainly focusing on, chronic myeloid leukemias as well as chronic lymphocytic leukemias with, dasatinib, bosutinib, etc. We moved more and more towards solid tumors as well. This year, we are launching palbociclib for, breast cancer, as well as abiraterone for prostate cancer.
In the midterm, we are even going for renal cell carcinoma, expanding more in hematological tumors through the acute myeloid leukemia, rare, but it's there, and there are like really new medications in this regard. Hopefully in the future, we are even going more and more towards ovarian cancer, which is really spreading right now in MENA anyway. Regarding immunology and immunosuppressants, I think if I'm going there, there's like a lot of products, but I'll focus on two of the diseases that are really causing a burden, one of which is multiple sclerosis. I mean, you all know about multiple sclerosis and how it's impacting the life of patients. We were the first actually to bring a generic oral multiple sclerosis product, and that was dimethyl fumarate.
With adding fingolimod there as well, we managed really to get the leadership in this market at an affordable price so the base of patients that were using such products increased and the convenience increased. So they were able to at least take this medication better than the injections. This year, we are launching a very unique product within multiple sclerosis called cladribine. This product is used twice per year. So imagine the amount of compliance that we will get for the patients by adhering to their medication by this product. Nevertheless, I'd like to mention that specialty medicines are really difficult to make. So with cladribine, as well as with dimethyl fumarate, it's not that easy. It's with dimethyl fumarate. It's like mini tabs encapsulated that really need special equipment to be created.
Now, moving even to rheumatoid arthritis and ulcerative colitis, and if you are aware and familiar with the JAK2 inhibitors and the JAK inhibitors, those are medications that are really efficient, and they are bridging between the traditional treatments so far as well as the biologics like tofacitinib, like baricitinib. We are having even a really very unique one that would be a surprise, but that will come hopefully in the mid-term for the JAKs as well. Moving on, so now we had like these products that are tailored to the local needs that are really related to the burden of diseases. What we need right now is to bring these products as soon as possible to the market. When saying being first to the market, that's really important from two perspectives.
The first one is definitely related to the patients because bringing affordable medications to the patients will increase their utilization as well, enhance their life when having affordable version of the product. But also, it is good for us. When you are the first to market, you start by building your brand equity before competitors start coming, and you start also gaining share of the patients that are using your product. So how can we do that in MENA to get a product from the selection to the market? You go through three different stages. The first one is related to availability of the API, the active pharmaceutical ingredients. And that's not something easy. When we talk about new products, you could imagine there's no supply at a global level. Nobody's interested in creating the API until there's like people asking for such APIs.
The second part is related to the patent where, in most cases, like countries like China, India, etc., you'll find like there's patents for the API, so nobody's gonna, so this is really a stage-limiting process for a lot of companies because we'll be waiting, putting the product on hold until API is available, while in Hikma, when all the other competitors are still searching for APIs. The second stage of development is related to the R&D and the development of the product itself. That's really an important stage because we build on our long years of experience that we have, especially able to work with complicated processes and decrease the development time of such products. The final stage, which is really not an easy stage, and it's a complex stage, is the registration phase.
And when I'm saying registration phase, I'm talking that when the product is compiled by the R&D and it's ready to be submitted. Now you go, and I think you're all aware of how the FDA and such regulatory bodies work. But when I'm telling you, we have 17 different markets with 17 different systems that they are having their own requirements, needs. So it's really crucial for companies to have the local knowledge, know-how, understanding what kind of deficiencies, inquiries that could come from the authorities so we would be able to either fulfill that when we submit the file or be able to answer immediately when such inquiries come up. These inquiries are what makes the product delayed in launch. So solving it all, that will make sense, and then we will have our product as fast as possible to the market.
Now, just to say that we are walking the talk so in the past five years, 65% of our new launches were either first to market or first generic, and what we are looking at when we look at our pipeline for the next five years, we are expecting 75% of our products to be either first to market or first generic, and first to market means we are even before the originator, and first generic is that we are the first to come to the market after the originator. This is just a slide that shows the regulatory environment in MENA and how it's really not that easy. Again, 17 different markets with files that are related to a lot of stuff like analytical reports, technical expertise, sorry, bioequivalence studies, stability studies, etc., that are really different from one market to another.
But it's not just the file that's submitted, but also even when we reach the pricing stage where pricing itself in MENA is related to reference pricing. And, you know, not understanding the rules and the reference countries, etc., and submitting the wrong price, you will get a rejection, and then you will have to appeal, and that all takes time. And then comes the reimbursements. And I would say it clearly that in MENA, it was all based on budget impact, but we are moving more and more towards, you know, health economists and health technology assessments and this stuff that there is a need for understanding completely what's going on with this and speaking the same language as the health economists as well as, and I will talk about it more when we go to the central to the customer centricity.
It's important for us as leading pharmaceutical company within the MENA is to drive this change. And this is exactly what we are doing. So moving on now to the third element of the right pipeline. So we have a product that's related to the local needs or in the market. We have a product that is registered and this first to market. What we need now is to have a bit of, you know, differentiation that will make this product difficult to copy by competitors. And this is what it will give us more time in the market to continue building our brand equity, gaining more share before competitors are able to copy and bring their products in, as well as that complicated, difficult products are what really is bringing the right solutions to our patients.
So when talking about differentiation, I'm just giving you three examples of how we differentiate our products. First differentiation example is on know-how differentiation. So that's our R&D, and that's related to the years of experience. So when talking about the know-how, and I will give one example, which is related to impurities and controlling impurities. I think you are aware of the nitrosamine impurity that came as a trend in the past few years where authorities are really interested in it. It's like a carcinogenic impurity. And some products were even withdrawn from the market, partially related even to the originators themselves, like varenicline, like metformin, valsartan. So it's not something easy to handle. And now governments are asking in MENA for such kind of limitation for such impurities.
Our R&D team managed to come up with a mitigation process that can control limit this impurity. Helping us right now, we're talking about the metformin that was launched, and we are the only ones in the market so far because others are still working on solving this impurity issue. Another part of differentiation is definitely the capabilities and the technical complexity. We talked about our operational and our sites in the MENA, the oncology side that we're first to bring so far in different markets, whether it's Jordan, Algeria, the API side that we have, the immunology side, in the past, the penicillin and the cephalosporin sides. These are all creating a big, you know, barrier to entry for competitors because no one can come and now build a manufacturing site and still build his own expertise and start bringing products to the market.
That will really take time until they can copy this. It's not just the sites. It's also what's within the sites. So when talking about technical differentiation, and there's a lot of examples, and I will just try to simplify it as much as possible. So when we are trying, for example, to get a soluble product, increasing the solubility of certain products so that we can work on is not easy sometimes, like what we did with cladribine and others. To increase the solubility means we need a complicated medical reaction through complexation, etc., which is not easy. It needs expertise as well as machines. We have also some areas like hot melt extrusion, which is like a completely difficult technique with machineries that's needed for it to transfer certain products into that liquid form.
To take the product back from liquid form to solid form, sometimes you need like freeze drying and you need a sort of nitrogen level at such low temperatures, which not a lot of companies can do. They might learn with time, but that takes a lot of time. That's really bringing us to being the only ones playing in this market. Finally, it's related to the BD. As Mr. Mazen mentioned, we have 40% of our business coming from BD. We are considered like a partner of choice. We have more than 100 products so far with almost 60 different partners that we are working with that entrust their products with us, whether through manufacturing, marketing, or promoting it.
Putting it clear, when going for BD, it means that either we have a product that is patented and you can't go around this patent, a product that does not have the API and we can't create the API, or a product that needs a very complicated procedure that we can do. Those three are big differentiators for us when we launch such products. Now we are really looking into innovative products to bring from partnership and licensing, like we talked about the GLP-1. We talked about the long-acting antipsychotics. We are also moving more and more to build agreements on pipeline-wise from companies that have really strong technical know-how, like what we did with SK Biopharma that are really good in CNS.
And we are bringing one of their products called cenobamate that will be launched soon and it's a really unique anti-epileptic product. Finally, we are trying to move further beyond the pill. We are moving to the diagnostics. Our first experience, I guess my colleague Sharif will shed more light on it, which is related to the Guardant Health. But we are also considering outside oncology, women's health, as well as anti-infectives. So far, 75% of our pipeline that's coming in the coming five years is differentiated in a way or another. We have the right product. We have a first-to-market. It's really differentiated. So we have good gap. What's needed now? We need the capacity. We need operational efficiency to give us the right quantities when needed at a competitive price. And here we come to two arms.
The first one is related definitely to the capacity where we are currently working on upgrading our manufacturing sites to increase the capacity by using high-scale speed machinery that also will help us in reducing costs, like, you know, tableting machines, powder filling machines, etc. Definitely, we are talking about the sites. We talked about oncology, the immunology. We still have like a lot of ideas of how we can really differentiate ourselves through the sites. And definitely, we're talking about the advanced manufacturing machines, whether that's the bilayer machines, whether that's, we talked about the hot melt extrusions, etc., to just upgrade our sites, not just a normal site. I think you will be visiting one of these sites, and hopefully, you'll be amazed with what you will see. Then we're talking about our cost discipline and how we can minimize our costs.
And I would say the operational excellence is one part of doing that by making sure that we are really optimizing the way we do business. And then there's definitely the alignment between demand and supply that's really managing our inventory to the right level. And of course, keeping an eye with having dual and sometimes three suppliers for the API so we make sure that we are really getting the best price. And finally, we have the right product. We have the right operations, but that's not enough. Some products really failed and failed hard because they really don't understand the markets. And when talking about the market in MENA, and I guess Mr. Mazen mentioned it clearly that it is called a branded generic market.
What does a branded generic market mean is that the prescription comes with a brand name, not with the scientific or generic name. In the past, the king of everything is the healthcare professional, the doctor. He's the one that's doing the prescription, and then it has to go to the payer to make sure that the product is available. The pharmacist has to dispense it, and the patient has to take it, and that's it. Now, COVID has changed all our lives, right? It did the same in MENA. When doctors are not available, patients have to go knock the door on the pharmacist. Pharmacists start to become more involved. They are now the frontiers. They are counseling the patients and taking the first decisions. Payers, with the burden of the budget, start taking higher responsibilities.
They are looking for the best options, not just budget impact. So the concept of health technology assessments starts coming in. And patients, they were dictating everything. They are now really learning more and more about their diseases and dictating what they need from the healthcare professionals. And so if you don't really understand such complexity and how to handle each of these, those stakeholders, it's a disaster, and it won't work. And a lot of products can really fail this. So in MENA, we have really a full understanding of what we are doing. We have 2,000 persons on the ground that are really going and visiting the different stakeholders. So when talking about physicians, they are still having value. Definitely, they are the ones that bring the prescriptions, and everyone's going there.
We need to provide something that's beyond just the high-quality pill because everyone is saying, "We are a high-quality company." We start engaging them in more interactive approaches just to give them more education, get them in, you know, making them feel that they are really getting something out of us, which is like new technologies that we are introducing them to, like creating local guidelines that really fit their patients in MENA. It's more like solutions. For pharmacists, we are driving the new role. It's more of like helping them at a medical level through, you know, digital platforms, direct visits. We are providing them with continuous medical education. I think I got so excited that the microphone worked. That's what we do with them. Now, the counseling itself is a technique that is missing in MENA.
The pharmacist's role in the past was just to sell the product. Now they are really taking this role, and we are so proud to be partners in that. Then definitely there's the payers, and we have drove the whole process. We started getting all the key health economists. You know, there's like a lot of models at a global level, whether that's the HAS, the NICE. I mean, you can count it. Then in MENA, there's nothing. We needed to be pioneering in this. We are a leader, so we have to drive the MENA. We brought all those health economists in a program that took us years, you know, to try to come up with something that really makes sense. They are looking at us as a partner of choice, and we are looking at the process as being highly proactive.
So whatever comes in from their end will definitely help us later on in creating our own solutions that match what they need. And finally, and the most important element of all of this is the patients. And we need to empower the patients. This is part of our responsibility, but we also need to be felt like we are not just a pharmaceutical company. We are much more than that. So we created the digital platform called Al Haya Hilwa, and that's in Arabic. And you are in Morocco. I thought you have studied some Arabic. So what Al Haya Hilwa means? It's a nice life. So we try to, you know, brighten things up. It's 12 campaigns per year. Each campaign is a variety of things like interactions with healthcare professionals, some influencers, tips and information. It's all about diseases, but it's also going towards well-being.
So far, we have more than 1.5 million followers on this platform, almost 700 million reach. And I think we have the highest engagement so far, especially when talking about Facebook and Instagram, with almost 4.3% from our audience. It's really helping our community, helping our patients. I guess this is part of what we should be doing. It's not just the pill. It's all the whole story, you know, and our army on the ground. We are visiting in MENA around 70,000-80,000 healthcare professionals. Imagine with around 2,000 commercial teams. Now we have a salesforce that's going and knocking the doors and doing the detailing. We have the medical teams, the MSLs that are really contributing to the medical path, not just, you know, selling.
Because as you've seen, we are the first to market a lot of products, and we are driving the know-how in these products. We have a market access team that's currently working with the payers, whether that's on the model itself, but also on the ground with different products. And we have definitely a lot of commercial teams that's working side by side with the pharmacists just to make sure that we are, you know, there and supportive as much as we can. As well, we have a lot of commodity products that are not promoted anymore. And, you know, it's more of like selling them patients with associations with the medical teams that we have, with the digital platforms that we have. We are really trying to do our best there.
I will leave you now before moving to my colleague, Sherif, with a small video that will take you through what we are doing in MENA for the different stakeholders. And I hope if you have any questions that I'm there available, that you can ask and shoot. So thank you.
Excellent. Good morning, everyone. Thank you very much for coming. It's great to be here. My name is Sherif Shafick. I head the injectable business and the hospital business in MENA. I have been doing that since September only. Before that, I spent three years doing business development. So I'll talk to you about business development, and then I'll talk a bit about injectables. And in the business development, I'll be talking about the full MENA. So it's the combination of branded and injectables.
Over the past 2.5 years, we have been very, very active in business development. So in roughly 31 months or something, we have signed 31 agreements. This is very, very aggressive and very accelerated. If you compare it to our previous history prior to 2022, we used to sign on average four to five agreements, and this is, in a sense, normal and expected. We have a strong balance sheet. We are a big player. We are the second largest company in MENA. We have a very strong commercial infrastructure and a very strong manufacturing infrastructure, and there are a lot of partners who are willing to work with us and would be happy to work with us, and we deliver at the end of the day.
So this acceleration was also combined with a different shift in our business development strategy, which is moving towards more and more innovative, highly sophisticated products. So if you look at the table, and these are just examples, not all our agreements are announced, by the way. So of the 31 agreements, we announced a fraction only of these. But if you look at this, you'd find that across all the horizons, the current, the mid-term, and the long-term horizon, we have projects that would make impact. And you'd find also that it is of increasing sophistication. So at the bottom, you would have complex products. These are products that are difficult to manufacture, difficult to develop, but you would see competition in there, like biosimilars, like long-acting injectables.
But as you move up, you will also see highly differentiated top-tier products, innovative products that are patented, like Remsima subcutaneous. That's the biobetter, like, toripalimab. This is a breakthrough, PD-1 that we have licensed and we are very hopeful about. We think with this product, we would be able to improve access for immunotherapy in the region. Today, PD-1s are being used, but not all eligible patients get to access PD-1s. We think we can make a transformation in cancer patients' lives with these products. Xcopri, which my colleague, Samer mentioned about. And as he mentioned, we have a wider agreement with SK Biopharma, which allows us access to their full pipeline in the future. And then there are also highly differentiated technologies.
Something we announced earlier this year that we are very excited about is our partnership with Guardant Health. Guardant Health is a genomic diagnostic company. They have various products and tests in the oncology space. With this partnership, we would be able to help governments screen populations for cancer, and we would also be able to help doctors and patients to identify what's the best treatment for their patients and the best treatment pathway, so overall, it has been a very accelerated great period for us in the past three years or so, and I think there is also only more to come, so we are just starting. We're just scratching the tip of the surface, if I may say, to put that to give you a glimpse of this.
Today, we have 160 open opportunities that we are looking at. So you can imagine in MENA just for MENA. So you can imagine there would be more and more business development coming out of this. Now, if I move to injectables and, so the MENA injectables is part of MENA and part of the global injectable segment. As you know, the global injectable segment is a $1.2 billion smaller business, increasing and growing. We are roughly 16% of that in MENA. And it has been a growing business. We have a double-digit CAGR over the past years, and we think it will continue to be a strong growing business. This business, let me talk a bit about it. So we are present in 16 markets. KSA is the largest market. Morocco, where we are, is a top-tier market for us and injectables.
We have a portfolio of 122 unique molecules and more than 270 SKUs. We continue to launch a lot of products. We are very active in terms of launching products through R&D and business development. Nearly a third of this business is biosimilars. The composition of this business is different from the rest of the global injectables because nearly a third of the business is biosimilars. Nearly a quarter is innovative products, patented, originated products. Then the rest are generics, maybe 45%. The generics, maybe a third of them, are complex generics. Then another two-thirds is standard injectable generics. This is essentially a hospital business. Our focus is with hospitals. Our key customers are authorities, payers, doctors, therapeutic area experts, pharmacists, and obviously patients. We leverage synergies with the branded.
So I'm both part of the injectables group, but also part of the MENA group. And we leverage synergies with the branded across the organization and across different therapy areas. Now, I want to talk a bit about this business in terms of its diversity. As Mazen mentioned, diversification of the business is very important for us. This is a business that's uniquely positioned for differentiation in MENA. This injectable business has a world-class generic injectables group behind it. So in the generic space, we are able to get products to the market and develop products far faster than the competition. That's a very strong advantage for us. And we are investing into manufacturing footprints also in North Africa and in the future in other countries. And you will see the site in Morocco. We think it's a very good and impressive site.
With this local presence, with local manufacturing, with the group R&D behind us, what's left is the customer centricity, as Samer, my colleague Samer was mentioning, and the people. We have a very strong commercial infrastructure in MENA, which we are utilizing in this business. The generics business will continue to grow and is a unique business within our injectables in MENA. The other business, which is unique, is biosimilars. I actually joined Hikma in 2015 to build and lead the biosimilars business. Hikma's history with biosimilars was way before that. We started looking at biosimilars in 2008, 2009. By 2010, we signed an agreement with Celltrion, which allowed us their pipeline of products, of biosimilars. Celltrion then was, you know, a small company in Korea that's doing something called biosimilars.
So we were way ahead of the market. So even by the time I came in 2015, biosimilars was still a very new area. If you think about it, the first ever biosimilar approval by the U.S. FDA was in April 2015. So in MENA, as Mazen was mentioning, there weren't regulatory pathways when we started for biosimilars. They were not sure how to price it. They were not sure how to test it even. They were not sure how doctors were not sure should they switch patients, which patients should they put on biosimilars. And patients didn't want to, you know, we're not sure if they should be switched to biosimilars. And so we used this period we spent a lot of years in shaping and forming this market.
And this allows us until today a unique position in this market. And it also allowed us a unique position in the healthcare ecosystem in MENA. And as Mazen mentioned, one of the great things we did in this business is we expanded access to biologics. And I have personally seen patients who would describe how life-changing our entry was because they would stay on conventional therapies for years instead of moving to biologic. And with our entrants, now they are able to access these biologics, which are transformational. And this is so the biosimilar business is another business that will continue to grow. In early 2020, in the biosimilar unit with the management team, we figured we should not be in only the biosimilar business. We should be in the wider biologic and precision medicine business.
And from there started the strategy of adding different innovative biologics, adding diagnostics like Guardant Health and all of that. And think of generics, biosimilars and innovative as engines working together to drive growth and to allow us to offer a unique, very complete offering in MENA. And innovative with all the differentiation, with all the different sophistication continuum. So, you know, from simple originated products to precision medicine products. And I want to give an example in oncology of how this gives us a unique edge in the market. This is a simplified patient journey for oncology. I'll not go through it.
It's, I just want to make a specific point from it, which is across the cancer continuum, we are able to help in screening and diagnosing cancer. We are able to help doctors identify and patients identify the best treatment for their cancer. We are able to, we have a significant cytotoxic, chemotherapeutic, generic injectable portfolio. We have a significant targeted oral oncology portfolio through the branded segment. We have biosimilars. We have immunotherapy, PD-1s. We are getting more and more innovative biologics. If you think about it, this is unparalleled in this part of the world. It's probably there are probably very few companies, even in big pharma, who can claim such a very massive and wide presence. And our intention is to continue to expand this presence in the future to be able to help the patients across their needs.
So with such a platform, where do we go from here? It's something we have been, we always think about, right? We have this very wide portfolio. We have relationships across the healthcare ecosystem. We have a strong global injectables segment behind us. We have great people and a strong commercial infrastructure, and we are building manufacturing. So where do we get from there? We think we have the potential to change the way patients are treated in MENA with all of this picture together. I think our business will continue in the future to evolve into three businesses or three segments and pipelines. The foundation portfolio, which will continue the generic portfolio, this will continue to grow through our investments in manufacturing. This will allow us flexibility in addressing demand.
It will allow us flexibility in customizing products to the market, and it would allow us cost efficiency, and also it allows us government relations and stronger relationships with authorities, which helps the wider business. The other part of the business would be the differentiated portfolio, and biosimilars with time will move between all three of these, so there would be in the differentiated some of them would be maybe commoditized in the future, and some would be in the precision medicine space, so this differentiated portfolio we will continue to grow this business. We will benefit from our sites in MENA to extend the life cycle of the products, and we will continue to utilize our commercial infrastructure to bring more of these products to the patients.
And then, the precision medicine business, and we think this will continue to be a growing area. There is a lot of opportunity for us to continue to grow more here, and it will be a profitable area. And we are also very excited about it. The thing I'm sure we will continue to commit to is ensuring that patients get access to the best treatments in MENA. This is something no matter what we will always deliver on. Thank you. And with that, I hand over to my colleague Tareq.
Thank you, Sherif. Thank you, Samer, for showing us the different parts of the business, how we're operating. And now to tie it all together, this is just a summary and a snapshot of what we discussed. So our strategy is leveraging our global expertise and our local knowledge to deliver on healthcare needs across the MENA. In summary, we're focusing on high value first to market generics, which places us in a unique position to build on the market and develop more in leading the way of how the market operates in the future. Our portfolio and pipeline are focused on chronic illnesses, which yield more consistent prescriptions and more high value prescriptions for Hikma and for the patients as well in terms of providing the first generics for chronic medications.
We're expanding on differentiation of complex products and partnering with innovative companies, which falls within our portfolio and within our strategy to provide a holistic solution for our patients and for the regulators as well, where we give them very high quality products from a trusted partner.
We're consistently investing in local manufacturing and in the communities we're in and in building on the infrastructure of the markets that we operate in. And we're evolving into a holistic healthcare company through the presence across the patient journey, as we mentioned, through our different therapeutic areas, through the different classes. Now in Hikma, where we believe, and from what we're seeing, is we're very well placed for organic growth. We have a very strong growth trajectory and a very strong track record of margin expansion in our branded business. This is just a quick snapshot of the financials we discussed earlier. And for the injectables, we're also in a very unique position where we're leveraging our global injectables presence with our local MENA markets.
We're investing in injectables manufacturing in the region, which will also give us more access to those local markets that we're operating in, where we will develop a leading position in those markets. These are just another snapshot of what we discussed earlier in terms of the growth and the margin. Thank you all.
Yeah. Thank you all very much. We're pretty much on time. We take 15 minutes for a coffee break, and then we'll come back and we have a Q&A panel. Probably we'll have about an hour to go through Q&A. Try some Moroccan tea if you haven't tried it yet. Yes. The sweets, they're really. You put your diet to the side today and have some of these sweets. Okay. Great. Thanks. Thanks for... sorry, I let everyone go a little longer.
I lost track of time chatting. Sorry. You have a panel here, and really this is just your chance to ask your questions. But as you saw from the bios, you have the GMs of our key markets. You have the head of MENA operations. Samer, obviously, you've heard from already in terms of all of our commercial activities. So this team can answer all of the questions, I'm sure. So really I think we'll open it up. If we feel, you know, the IR team feel that there are certain topics that we'd love you to hear about, but the question hasn't been asked yet, then we may jump in. But otherwise, we'll leave it to you to drive the Q&A. We will hand you the mic.
If you put your hand up, we'll hand you the mic if you don't mind, just talking into the mic. That would be great.
Hello. It's James Gordon from JP Morgan. Two questions on growth areas. One was on GLP-1s, which were mentioned on some of the slides. But the GLP-1s, is it just Victoza, which is a product that I think the patent is just going, and something like semaglutide, which is a really big opportunity, would only be like in the 2030s? Or might that be a bit earlier? And would we think on this one, would you be more like a distributor? 'Cause someone else would be doing the API and you would be using your fill finish or what bit of the GLP-1 would you be doing? How much of it would be Hikma versus actually more just distributing someone else's GLP-1s once the patents go in the 30s? That's the first question. Maybe I'll pause there and then ask the second one.
So again, as mentioned, I mean, GLP-1s is something that is on the. So, it's crucial again, as I mentioned. So, you know, moving from the SGLT2s, DPP-4s that have been there, now the GLP-1 is what's coming on. I don't think we can disclose right now which kind of GLP-1 that we are bringing, but there's definitely one that is that's on our pipeline right now that is coming. Way that we are going to work with such products. I mean, those are like peptides. We are considering both, but I think the beginning would be definitely through just, you know, bringing the finished product.
Thank you. The other question was Saudi. I think on the fact sheet it says you've got something like 6% share in Saudi, and it looks if I look at some of the other slides, that would imply at least on the IQVIA data that Saudi is almost all of your sales, which I think it probably isn't. Probably the IQVIA overstates it. So how big, how focused is your business in Saudi? Is Saudi your biggest market? And Saudi looks like a really high growth potential market, but I think there's some domestic Saudi companies that are also investing in lots of manufacturing. I don't know if they might have a bit of an advantage in terms of being seen as local companies.
Is to ask the question now, how much is Saudi of the overall business? Is that a big opportunity or is it also a bit of a risk that some local companies get quite aggressive in terms of how competitive they are?
Saudi, I would say it's almost like one fourth of our total business. IQVIA numbers definitely there's the way they are counting, you know, public prices, the public prices that is already included. But in general, it's just like one fourth of us. Just what's the other question?
I'll take that. In terms of local competition, you know, as the MENA's developing, the healthcare systems are maturing, we will see, and we are seeing a lot of local competitors come up. However, they will take some market share, they will compete, but I believe, or we believe as Hikma, that we're positioned in a much more unique position where we have stronger capacities, we have a global reach, we have a very strong, strong knowledge base. So they will compete, but the market's big enough for everybody to compete. But we, we still see ourselves in terms of our pipeline, in terms of our innovation, in terms of our integration, in terms of our operating model, where we still have more of a competitive advantage down the road.
If I may add to that as well, I mean, we are a global company but with local presence. So we've been in Saudi Arabia. I mean, almost for us, it's forever, right? It's. We've been there for so long with our manufacturing on the ground. We are looked at as also a local player, and that gives us as much advantage as any other, let's say, like you put it, local Saudi, local companies starting up.
So, yeah, I think maybe just to add for Saudi Arabia, because I'm managing this territory, this time. So we do have big ambitions in this market. It is definitely the biggest market in the MENA with market size exceeding $20 billion. And we are ranked number one actually there with market share exceeding 6%. Now we just announced that we will have a new project where we are planning to localize our injectables there, plus our oral oncology medications. And we believe that this kind of localization will give us an edge and we will be ahead of the market as always.
Thank you.
Hi. Thanks. Emily Field from Barclays. I had one question about that, the chart that showed the share of, you know, government payers, versus private payers. And I think you mentioned that, you know, since the Arab Spring, the government share was increasing, which you, I believe you said you viewed as a good thing. You know, in the U.S., obviously we think the opposite in terms of pricing that, you know, it's better for private to have a larger share. So I was just wondering if you could give some color on why you think that is a good thing. And then a financial question. Obviously, there's been some pretty significant margin expansion over the last few years and approaching sort of more of a mid-20s level.
You know, do you have any sort of longer-term goals for margin expansion because you're growing the top line quite rapidly, but obviously still heavily investing in the business?
So I'll take the first one. In terms of the U.S. model, it's very different than the MENA markets because, as you know, the U.S. is a freely priced market. You have GPOs, you have, GPOs for the hospital segment, then you have very big retail channels. The MENA market is scattered more and more. Now, in terms of the governmental healthcare spending increasing, that's a good thing because the whole healthcare sector and the percentage of GDP spend is increasing from government and they're focusing more. So you're gonna have more focused vendors.
They may be low, lower margin business, but they're still a very big substantial part of the business where you can group your volumes. So the market's becoming more organized. You're having unified purchasing groups. So with Hikma and with our capacities and with our very strong manufacturing capabilities, we view this as something positive for us because we believe we can capture more share. We have a very strong, efficient position in the market. In terms of the question regarding margins, we were in the low 20s in the last couple of years and we've worked very hard to reach the mid-20s, but we're gonna stick to the mid-20s over the next couple of years.
And Paul Cuddon from Deutsche Bank. Just going a bit high level, I mean, you said your ambition is to become the largest pharmaceutical company by sales in MENA. So, I mean, how far have you got to go and how, yeah, how long might that take? Yeah.
So based on the IQVIA figures, Sanofi is the number one. And the difference between us and Sanofi is something between 15%, which I believe is something that, I mean, working hard as we are doing right now, could be done. And it's like an ambition. It's the whole ambition where we need really to be. So, it's something that we look for.
Okay. Thank you. And I'm pretty sure I've been covering Hikma for about 10 years or more, and I'm sure back then you had 2,000 sales reps, and that's basically not changed. So, I mean, are you having a bit of an opportunity now to invest in the sales force? Are there any areas where you're looking to expand to drive faster market share gains, or are you focusing more of your investments on digital and other ways to reach the patients?
So, our commercial excellence team, actually, are the ones that's working on making sure that we have the sufficient reps that can really make the most, you know, optimized calls. So, that's why what I was saying is that we are currently visiting around 70,000 healthcare professionals. And put in mind that products have their own life cycles. So some products are completely out of promotion and others are coming in. So it's fine to see that the number of reps are the same. That's a good sign that we are optimizing our resources.
Also bear in mind that we are moving more and more towards specialty as we have explained for both segments. And specialty requires a different structure in terms of sales force. So this is in line with our strategy and how we are moving.
And if I may add, the quality of our sales over the last couple of years has also shifted more to chronic medications, to more high-value products. So the return on investment that you're getting from your boots on the ground is higher. You're maintaining the same number, but you also have strong backend support functions where you have the medical team linked with the market access, linked with marketing that are driving more efficiency together holistically with the sales team. So you are maintaining the number. We're investing where it's needed to drive more efficient, more high-value sales, more chronic prescriptions.
And also through the optimization of our portfolio, as Sam mentioned, we're weeding out the older products based on life cycle to move to a more commoditized approach where you detail them through more of a commercial presence rather than a branded generic presence. So it's a combination factor.
Thank you.
Hi, Dominic Lunn , from Morgan Stanley. So obviously on manufacturing, you've obviously talked about your local manufacturing presence in countries and MENA being an advantage. I understand part of this comes from a regulatory perspective, where there's a preference to use locally manufactured products when available. So my question is, if you have a manufacturing presence in a country, does that give you a license to then passport in the rest of the drugs in your portfolio ahead of competitors, or does that preference only apply to drugs actually manufactured in the co untry? And how many markets actually have this model of preference for a local product?
So in terms of, as you mentioned, the MENA 17 markets with 17 different regulatory authorities, each one has their own regulatory framework. Now, a lot of markets, what they do, and to be specific, Egypt today, Algeria, Morocco, Tunisia have a closed market system where if it's manufactured locally, in one way or another, it's banned from importation, whether it's through a box system that they have in Egypt. So in Egypt, the regulatory framework is they have 10 boxes, you have one originator, one imported generics, then eight locals, and you can't enter a new registration. So in a way, the market is closed. Algeria has a different system where if it's manufactured locally, they ban it from being imported. So every market has its own story.
So being a local manufacturer gives you an edge because it's a market access site. Now, in terms of bringing your portfolio, it depends on what you thought. So some governments, for example, allow you to do secondary packaging for a while, then to bring the products in. But it's not a guaranteed passport to bring the product in because if it's localized, then it's localized and it may be from scratch in certain areas.
Hi, morning. It's Seb Jantet from Panmure Liberum. So a couple of questions. First, just on the regulatory environment. So you said there's 17 different regulatory environments. What is the chance of that changing and there being some form of mutual recognition? Because, you know, clearly having different regulatory environments in lots of small countries is a barrier to medicines in the long term. And you have seen some signs of regulators starting to think together. So just the first question on that side.
Actually, within the foreseeable future, probably it's not gonna happen. I'm speaking because I was on the other side of the equation. Within the foreseeable future, probably what you are asking will never see the light for a variety of reasons. I was on the other side of the equation. I was on the regulator side for some time, and myself tried it. I was telling some of your colleagues during the coffee break, when I was Minister of Health for Jordan, the Arab League had meetings for different ministers of health, and I brought this subject because I personally see the commonalities between them are very high. So why not just complete the whole thing?
It's much easier to have just one file for me and, like, the rest of the world. And for a variety of reasons, we, honestly, we failed to do that. The good news, the big part of the different countries are basically the same. So probably 95% of the requirements in Saudi Arabia are not different from Jordan. So there are those minor details in certain requirements. And this is where Hikma's strength is. We know all of these because we have local regulatory teams within each country from those countries. They know the rules and the regulations, and they know how to register the product fast, get the best price and market faster than other companies. If you want to be selfish, probably it's a nice thing to have, for MENA because MENA, from our perspective, is our backyard.
Just want to add here that we are working with different regulators in MENA in the same way that we are working with the health economists in a way that we can facilitate some processes, you know, bring them all together to try to come up with similar routes in markets. But I don't think, Dr. Salah mentioned, I don't think it will reach to the level that they will have once it's. Actually, to add, what we're seeing is regulators want more and more localization, actually. So they're every country's pushing for more localization. So in a way, it's moving in the other direction, especially post-COVID, because there were a lot of disruptions in supply chains. So all the countries are thinking of how do I secure my own supply? Everybody's cared for the security in terms of healthcare. So they're pushing more towards localization.
There, there's a fine balance, you know. You can't manufacture everything everywhere. You have to think where you can excel, where you can add value, where you can maximize. So this is how we navigate across it.
Thanks. If I could just ask a couple of questions about pricing, and I appreciate these may be kind of quite difficult to answer in concise format, but I'm trying to understand how the framework pricing is set in the larger countries and what they are taking into account when they look at the framework pricing. Then, secondly, just to follow that up, you kind of mentioned that you see government being more of a payer as an opportunity, but what is the risk on pricing?
Because obviously what we see in other markets is the government gets much more aggressive on pricing and you get into a cycle where you're being obviously reimbursement cuts every year on pricing.
So I can't say, yeah. The basic system in the different countries are probably the same. They use the country of origin price, and they use a basket of countries in the region and globally as reference. And they look at similar products that are already registered and priced. Using this combination, they will set the price for that particular molecule, and they make adjustments for the dosage form, and there is a combination and the pack size with adjustment. And funny enough, some MENA countries, they reference each other. For example, Jordan reference Saudi Arabia. Saudi Arabia looks at Jordan.
And so we take utmost care when we launch our products [on] where to register first, and then which the next country we go to. We call it the second wave. Sometimes we do that at the level of the SKU, not at the product, because it makes a difference the way the countries, they make their pricing. The other thing we do is because of our local presence, we anticipate what are the changes in the pricing regulations, and we have early discussions with the different regulators on what will be the impact, because any regulator would not only the intention is to get the lowest price, but they would like the drug to be available. So at such and such regulation, you may drive the prices down, but you will not have the drug.
Hi, it's Alistair Campbell from RBC. Just a couple of questions. The first question is kind of, I suppose, the ultimate, top level question. You know, when you think about the next sort of five to 10 years for the business, is it sort of focused on your current 17 markets, or are there any geographies you'd look to maybe expand into as opportunities in the kind of medium to long term? And then the second question is maybe a bit more sort of granular. Oncology is clearly an important growth driver for the business going forward. We're talking a lot about precision medicine. So I just want to get a sense of, you know, broadly across MENA, how penetrated are the diagnostics themselves in terms of identifying those patients? And so how important for your growth is actually increasing penetration of diagnostics alongside the pharmaceuticals themselves? Thanks.
I'm gonna answer the first part. Today, as a MENA team, we're looking on managing the MENA. And in terms of geographical expansion, if it makes sense, we will geographically expand. But our focus now, our panel discussion is for the MENA. And I think moving forward, as opportunities come, we'll expand globally. Now, in terms of the diagnostics, I think Sherif will answer.
Driving diagnostics would be important for us. It's, as we get into more and more precision medicine, diagnostics is a key area to grow that. And that's something that we are working to ensure that we buy into that.
So just following up on that, do you have a sense of, you know, broadly within MENA, how penetration or usage of diagnostics would compare to, for instance, Europe or U.S.? Is it still very, very low? Is it kind of medium?
It's lower than the U.S. and Europe. That's for sure. The exact number will vary depending on the diagnostic output. There are even within MENA, MENA is a wide range of countries, right? So you know, a country like U.A.E. or Saudi Arabia would be different from a country like Egypt or Turkey.
Sure. Thank you.
In terms of expansion, you have to remember, we still have some markets in the MENA that we operate in only on export. Now, I'd like to think, sometime down the line, we'll be forced to manufacture in these markets. I'll give you a good idea. Iraq, I was just talking to one of your colleagues in the nineties. Iraq was one of our biggest markets. Huge, it used to constitute around, I'm talking 1993, long time, used to constitute around 40% of our group sales before going to the U.S. Today, it's minimal. So the potential of growth in Iraq is big. But today, the regulation in Iraq to have your own operation doesn't exist. You need an Iraqi partner.
So we are waiting until the situation becomes more clear where we can have our own operations in Iraq because it makes sense to do that. If you go into Egypt, Egypt, when we bought the first company, our market ranking was 49. Today, we are number eight. Yeah, eight, nine. Now, to grow from eight to the top tiers, we still have lots of opportunities, but we need to find a proper product, a proper portfolio, and how to expand our market share. Plus, we need to mitigate the risk. I always tell, this is very critical in the MENA. Today, Hikma can double its sales in the MENA, but the problem is how will you collect your money?
So you have to be prudent. How much risk you want to take? How's your cash flow? How are your receivables? And how to mitigate the risks of currency fluctuations? You remember two or three years ago, we took a hit on Lebanon that costed us $15 million-$18 million for hyperinflation. We changed our business model. We took a hit on Sudan that took, costed us, I think, around $80 million or $100 million. But yet we were able to expand to other markets. So what's crucial about the MENA is how much risk you want to take and how to keep a healthy balance sheet. So this also plays a lot in how we will expand in the MENA going forward.
Hi, Bita Sorouri with Berenberg. I was just wondering what percentage of branded sales are through tender sales versus out of pocket, and how is this expected to change in the future?
So are you talking about percentage of prices versus the development?
Yeah, tender sales for now.
That is 30/70 for now. What we are expecting is that the whole model in MENA. It's again 17 different markets with different models. I'm talking about the healthcare system. So I think there is a movement from what we have right now towards the national health insurance where coverages are increasing.
Government is involved in supporting the employees of the healthcare. And then the collaboration is between the private and the governmental sector in providing the service. It's happening right now in some of the markets, like the North African markets, and we are expecting this to expand further to the rest of them. So that's why it's expected that the governmental expenditure and involvement will increase, but that will not limit the private partnering with what they're going to do.
Great. Thank you. And, just another question. During the November trading update, it was noted that Hikma were very active from the BD side. What sort of M&A targets would the company be pursuing?
Can you repeat the question, because I can't hear you?
Oh, yes, sorry. During the November trading update, it was noted that Hikma are particularly active from the BD side. What sort of targets would the company be pursuing? I know you mentioned like more innovative medicine and stuff like that.
So, so in terms of M&A, we're obviously we need to grow organically and inorganically, but we can't disclose any deals or any potential pipelines. But just to give you an idea of when we look at a target acquisition, we always look for something that will give us either expanded growth within a geography. So, for example, if we're present in one manufacturing technology in a region, we look for a new technology, or we'd look for new reach or expanded market share or products that fit within our portfolio. So we're always looking for the strategic right fit. And once this comes, obviously we'll jump on it and take action.
Okay, great. Thank you.
Thanks. G uy Wiehahn from Kepler Cheuvreux, can you talk a bit about your relationship with Celltrion and how you manage the risks with regards to that? You know, how do you prevent them from increasing the prices too much or reducing the supply, given it's such a key supplier?
It's a very healthy relationship. They are a long-term partner, since 2010. We have contracts in place, obviously. So, that regulates these things. But, we also work in partnership. We have a lot of respect for each other. We have relations across the both companies. So all the way from the chairman of the company, along with management, and all the way to the teams and to the working groups and to that. So, I think overall Celltrion is a very healthy relationship.
And just to add to that, with all our licensors and partners, we view it as a long-term partnership where it's a win-win. So we both have to grow together. So by the end of the day, it has to make sense for both. And we always work together to find an avenue to maintain a healthy relationship where both parties grow together.
Yeah, Christian Glennie with Stifel. Just on the thinking about the nature of the, you know, if I understand it correctly in terms of the these branded generics, the doc, you know, the doctor has to write the brand name on the prescription and things. So, and that's been the way it's sort of largely operated.
Are there any indications or any reasons why it might move to a more standard generic market where, you know, even if you write the brand name, you get substituted for the generic, you know, as is typical in many markets, that it becomes a more standard generic market? And if it does, you know, what's the, what might change there for you guys in that, in that concept?
I mean, it's, when we say it's like very branded generic, it is branded generic. Nevertheless, there's the exceptions here and there where, you know, shifts and switching of prescriptions happening in the pharmacy level. And I think the move more and more towards the national health insurance, that could also dictate the prescriptions to come with the generic name. But putting in mind that, we've been there for so long, almost around 50 years now. So the brand equity of Hikma, its products is really very solid. And when we talked about the operational efficiencies, we talked about two very important arms, one of which is definitely the capacity, but the other one is the cost effectiveness.
And that will give us edge both ways because product shortages are something that happens all the time, especially with the increase and decrease in demand. And from the other end, it's all about also the cost that we have. And that's for the general generics. But then we talked a lot about the differentiation, right, where we have a little bit of complexity, 75% of our pipeline, and that will give us the upper hand when talking about being there only with the originator.
So that's a real opportunity because then we will be the only generic. And then we are talking about chronic diseases as well. So chronic diseases are more sustainable in a way that patients are taking the medication and they keep on using it rather than, you know, every day you will have to generate a new prescription. So that I think those all are really something that we can secure our prescription in the coming future.
In addition to that, we also govern our business through, as Tariq said, since we are one-stop shop, since we have the widest portfolio, with many therapeutic areas, including the commodity products, that makes us very attractive for all the wholesalers, for the big hospitals, for the groups to do a contract. And we created through our business, through our sales teams, a strong commercial arm, which is the key account for their work, managed to make a contract, a bundle for our portfolio. So we are governing our buying process in addition to the prescription. So we covered all areas. And Hikma used to be a step ahead in the market and part of shaping the market. So definitely when it's change, we will be in the middle of this and we will be part of this change.
If you allow me to add as well, I think we've had a conversation during the break from the, because someone mentioned the efficiencies and the capacities, and we had this discussion having multiple manufacturing sites as well. That gives us an edge when it comes to that subject because of the efficiencies we can use and the expertise of the different sites and the different manufacturing in different countries. We can transfer it all across the group. This is besides the global expertise that can give us that cost efficiency as well. And this is very important even if the market shifts.
Yeah. Also, I mean, sometimes we explain our commercial infrastructure in a simplified manner, right? Because it's an easier message. But our commercial infrastructure is far more than sales. It's far more than prescription. So, as Said was saying, there is market access, there is a lot of medical, there is marketing, there is sales, and there are multi-channels, and we are present and very strong across all the channels of the ecosystem. It's we think we are in a pretty secure position in terms of our commercial capability.
Thank you. And maybe on this, you know, effectively you're talking about an acceleration of growth on the revenue side. You know, you've done 6% over the last few years. You're targeting 7%-8%. I know there's probably a number of drivers behind that. Obviously, there's the mix in portfolio, it's innovative products. But is it possible to rank some of these sort of key, you know, top three key drivers that are, you know, the key things from your side that will deliver that 7-8% acceleration of growth over the next few years?
I think we have mentioned it. If you look back to the slides where we were talking about those therapeutic areas that are really causing the highest burden, and this is where we are really putting our money. So, diabetes, definitely diabetes is something that is growing and growing very fast, and we are really a major player there. And then you look at the oncology, where our sites, our differentiation, our BD deals, and then you look at even the immunological products, whether that's in multiple sclerosis or moving to rheumatoid arthritis, et cetera. These are the complex medications that are driving the growth there forward.
Thank you. And then maybe just a final one on BD. It sounds like, you know, you talked about 160, was it, or, you know, live opportunities now. Just put that in context of maybe where you would've been a few years ago and just a bit of a sense for what sort of, you know, the nature of those partners on the other side of the table. Is there much of a shift there and how you expect that to progress and the reasons why you're seeing this step up in BD interest as a, as a partner of choice?
Sure. Sure. So I mean, to put it in context, on average, we used to sign four to five agreements a year. That's our average from 2012 to 2022. Today, what we showed in the slide was 31 agreements in 31 months, which is 12 agreements a year roughly. So it's tripled. So it's a very, very significant acceleration. And in terms of active opportunities, it's similar to that.
It's in line with that. So again, it's almost three times or maybe four times what we used to do. In terms of opportunities, they would be similar to what we mentioned. So it's there is a lot of work on pipeline opportunities, like the ones with the SK Biopharmaceuticals, the opportunities where we get full access to pipeline, a lot of work on differentiated, innovative products, a lot of opportunities in these areas, in the areas where we mentioned it's a priority for us in areas like CNS, like diabetes, oncology, immunology, all of these areas. Obviously a continuation of the precision medicine and biologics. So a lot of opportunities in the biologics space, whether the current monoclonal antibodies, the up-and-coming ADCs, bispecifics, a lot of opportunities also in this area that we are looking at.
The expansion in the rest of the precision medicine to get us to be a wiser healthcare provider than the current than just a medicine provider. So I think this is where the future would be. Also, complex generics continues to be an area we are pursuing through partnerships. Not all partnerships are only commercialization partnerships for us in here. There are partnerships that would be co-development. There are partnerships that would be manufacturing. A lot of our partnerships are still manufacturing-based. We would manufacture the products. And there are areas also where we are looking at how to get more control over our products. Are there any? Oh, both, I can see.
Sorry, just one follow-up, please. Just looking at the success that you've had with biosimilars kind of within the region, I suppose there are two questions relating to the under-penetration of PD-1s and other kind of immuno-oncology therapies at the moment. Was it the price that was the initial problem for the originator brands, or was it trust in the products that the Hikma has helped and then built? And to what extent might sort of PD-1s and other therapies be a major future driver for the Hikma business?
In biosimilars, it was a combination of things. So, price is a factor, but also knowing how to work across the whole ecosystem. You know, ecosystems are complex, right? It's who whose decision is it to use more biologics? It's not just the doctor's decision. There needs to be guidelines. And who decides the guidelines?
It's a combination of multiple stakeholders. And then there has to be the budget from the government, and there has to be the willingness to do it. There has to be reimbursement systems to be put in place or changes in policies. So it's a relatively complex process to expand access to a specific treatment, especially the more expensive treatments like biologics. And a lot of the companies that have such products do not have a similar presence to Hikma in MENA. And I'm not talking only about the, you know, the small and mid-sized biotech companies who certainly don't have this experience in MENA and are far better off partnering with us. But even, you know, some of the big pharma are not necessarily that big in MENA.
And so we do not necessarily know the best ways to improve access. Part of it was pricing, of course, but it was not only pricing. If you look at what happened in biosimilars in other markets that started with us, you would see that in Europe, for instance, the market just dropped, right? So we launched in fingolimod , almost in line with Europe as an example. And in Europe, you could see the market dropping because it was, you know, a lower price. It's a far lower price. There is more usage a bit for the market alone. Our market was not dropping because we diverted. We helped in diverting these cost savings into more access, which helped patients. So, the thinking for PD-1s and other biologics is not just PD-1s.
PD-1s in all of the other innovative products would be exactly the same. How do we ensure we use our infrastructure to get more access, to give patients more access to these medicines? And you know, it's sort of an ethical responsibility also on our side. That's why we are very keen to do it. If some of these innovative products, if we don't partner on them, they might, the patients might not be able to have them continue.
Excellent. Thank you. Sorry, can I ask a follow-up on margins? And you've seen this quite significant margin expansion in the last few years, and that's come despite, you know, the investments you've been making. Obviously, you have been doing more by the, you know, that go local, you know, lots of expansion, which typically would've been, you know, instinctively a headwind to margins. So you've seen that margin expansion despite those perceived headwinds. You're talking about, you know, still looking to invest across, you know, building out more regions. So, which is, you know, we've seen hasn't actually been that much of a headwind necessarily to that margin expansion. So you're at mid-twenties. Just conceptually, any reason why you would, you know, we shouldn't see some further margin expansion over the next, you know, three, four years?
Because we haven't, you know, we haven't seen that, you know, the sort of investments being much of a headwind to margin.
So the investments haven't been a headwind to margin because of multi-factors. Our product mix has changed. The price per prescription has gone up. We worked really, really hard to take up the margins, and we believe we should maintain a position in the next five years to stabilize at where we're at, given all the new products, all the investments, the different therapeutic areas we're getting in, the different facilities, you know, managing 17 countries. It has its OpEx. It has its CapEx. But we believe with our current pipeline, our future pipeline, and our product mix, and the way we're shaping ourselves in terms of driving efficiencies, we should maintain where we're at today in the twenties, which is what we're currently at.
I just wanna jump in with a quick question, if that's all right. Just jumping back to growth drivers and Iraq. It would be great to hear from you about Algeria. We've obviously, it's been a phenomenal performer over the past several years. So maybe go into a bit of why we've been so successful in Algeria. And also, as we're in Morocco, another market you oversee, can we replicate that kind of success in this market as well?
Actually, our success in Algeria, it came by design. Like always, Hikma, the success is by design. We capitalized on our strong foundation that we started in the nineties as Mazen mentioned, through our strong operational plans that we have. And we complement this with all the needed stuff, the portfolio, the pipeline to end up with a very strong portfolio. We specialize the portfolio. We shaped ourselves according to the market dynamic, according to the healthcare system in Algeria. And we were able to structure ourselves toward the therapy areas, the diabetes, oncology.
We were the first one to penetrate the oncology through the local site, and we made benefit of this. We led the change in the habit of even the prescription and patient pool by entering the local oncology for the first time in Algeria, and we succeeded to serve much more patients. On the other hand, it reflected for us to grow in Algeria. The same happened also with the specialized therapy areas like the diabetes and multiple sclerosis. Also, we were the first in the market to localize as such important and specialized area. For that, we continue our success. We always used to be successful and pioneered in Algeria, and now we are much more in the excellence phase of our business.
Definitely, we will, we will mimic this in Morocco, where we are, and you will see one of the state-of-the-art of our site that you will visit now in the injectables to bring injectable site to make use of our expertise in Portugal through our sites to make the similar to transfer the technology here. Also in Algeria, by the way, we are soon, we will also launch our new site in the injectable. So by this, definitely we will, we will succeed. We will increase our opportunities here, guys.
And I, I believe also, yes, worth mentioning that, you know, most of the local players, they go for the easy way, which is the oral dosage forms. Now we, we select the easy way and the hard way. By being in injectables in Morocco, I believe we will have a great differentiation and strategy, especially that we will be the first one who will bring hard-to-make injectables, especially lyophilized injectables. We will be the first who will introduce this technology in this country, which is very important.
Thanks. I'm just gonna, as I've got the mic, the follow-up for Tamer on Egypt, your VP of Egypt and Sudan. Obviously it's in a market with some troubles with FX recently, but it's a large and important market for us. If you could just elaborate on why it's an important market for us and our ambitions there.
Egypt is a great country and it's a tier-one market, where it's volume-based and basically we are very well positioned over there. Egypt is 114 million people. They live over there, which is entitled a huge potential we can capitalize on. We have the first oncology plant in Egypt. We have the first immunosuppressant plant. We will continue our success in Egypt to have more unique products and launch more innovative products with our partners and basically to continue the success story of Hikma over there.
And Guy, if I may just answer in relation to FX, you know, we've been in the MENA for a very, very long time and we're used to managing the headwinds of the FX. And this is something we know happens, is gonna happen, is gonna continue happening in the MENA. It's just how we manage our business, how we look at our cash flows, how we spread ourselves in those markets to deal with the FX. So.
Yeah, I've got it. I guess it's kind of linked into FX. I mean, obviously one of the ways of offsetting that is by exporting product from here over to kind of the other markets. I'm wondering to what extent your local manufacturing here is used to support other markets or is it just supporting your home markets?
So within the MENA, we have different sites and different classifications for sites. So some sites are centers of excellence where they export globally. Some sites are market access sites where they work only for a local market. But in general, we do export a lot within MENA from one site to another based on the regulatory requirements, based on the products, because some products we manufacture, for example, in Morocco, we have our own R&D for Morocco.
Morocco has different requirements for registration in terms of stability, which are not across the region, but they're closer to Africa. So it could be a good site to manufacture from Morocco to Africa down the road. We also export from Tunisia to other markets, some to Africa, some to other markets within MENA. We export from Jordan, Saudi Arabia to Iraq, from different sites to Libya. So we do export internally and we use that to offset and hedge. So we've done that in Egypt actually to offset the currency. We export from Egypt to Iraq, to Yemen, to Tunisia and also to Libya. So we look in terms of our product optimization and sometimes, and this is the uniqueness of Hikma, sometimes a certain market may want the product by itself.
So when we look at products, we look at our products across the region, then we look at them globally. Some products we sell everywhere, but some products we may sell across MENA and some products we may have in one market only in MENA based on the market needs, whether it's through buying a file or whether it's through working on it with R&D. So we do have the flexibility and our model allows for that in order to give us the opportunity to be flexible and maximize for the market.
Just to add to what Tareq has said, basically this starts when we do an R&D for the product itself. We decide where to launch it. That continues basically where it's gonna be more efficient, will be very lean to supply to the market. We can be very reactive, very reactive. So we study all these aspects and we decide that this product should be launched in Saudi Arabia first or in Jordan or in, basically in, one of the 20 manufacturing facilities that we have, which basically will be able to leverage the potential for the product, the availability for the product, and it makes sense also for us from cost perspective and efficiency.
And if you allow me to add to that as well, I mean, Tareq has touched on that. It is not only the finished products between our sites. We go as far as capturing opportunities in different markets by semi-finished products, by different blends, and which gives us an edge where even if there's an opportunity or a big tender that we can increase our revenues or our presence and we utilize that between our different sites, which this is again where the edge is versus other competitors no t being there able to do that and be acting very quickly to react to such opportunities.
Thanks.
That's Lance. Any more questions? Otherwise, we're right on time. So, I would say thank you to all of you for participating in the panel. We'll go to lunch. We've got an hour for lunch. Of course, our whole team will be there. So, you can carry on, learning about the business over lunch. We'll come back in here for a short presentation from our Moroccan team, and then we'll go out and see the site.