Beximco Pharma a company of general investors run by professionals: CFO Ali Nawaz

Beximco Pharma, one of Bangladesh's leading drugmakers, has long been run by professionals with no board interference in its daily operations. The company is largely owned by general investors, who hold 86 per cent of its shares, while sponsors hold the remaining 14 per cent, said its Chief Financial Officer (CFO) Mohammad Ali Nawaz in a recent interview with The Financial Express (FE), where he shared insights into the company and the pharmaceutical industry as a whole.

Q. How have the political changes of August 5 impacted Beximco Pharma?

A. The government change on August 5, 2024 brought an extremely difficult period for us. The Beximco name attracted widespread misinformation, hostility, and reputational damage. Several offices and depots were attacked, vandalised, looted, and set on fire, including our Dhanmondi Road-7 headquarters. Five depots and many delivery vehicles were also burned across the country.

We faced further hurdles as our RJSC online access remained blocked for over a year, and trade licence and other renewals were delayed. However, the government provided exceptional support in managing factory worker unrest and ensuring smooth banking operations.

Q. How did the company manage to survive amid such adversities?

A. First, Beximco Pharma is professionally managed, with no board interference in daily operations, so there were no management disruptions. Second, since 86 per cent of our shares are held by general investors and only 14 per cent by sponsors, we communicated this clearly to stakeholders, which helped ease much of the unwanted situation.

Most importantly, the quality of our medicines -- and the trust of patients and doctors -- kept our sales stable. Our employees also stood firmly by the company, working tirelessly to overcome operational hurdles; not a single employee has left in the past 16 months.

As a result, we were able to maintain normal business operations, in line with other leading companies.

Q. How much bank loan does Beximco Pharma have?

A. Many people assume we carry a portion of the Beximco Group's debt, but the reality is quite different. Beximco Pharma operates entirely independently and is run by professional management. At one point, there was even a false claim that we had taken Tk 50 billion in loans; in fact, our highest borrowing was Tk 6.0 billion in working capital, of which less than Tk 1.0 billion was utilised.

Currently, the company's total debt -- both local and foreign -- stands at around Tk 2.50-3.0 billion. With annual sales of nearly Tk 50 billion, our debt-equity position remains very healthy. Each year, we reinvest a significant portion of our profits to support expansion and diversification.

Q. How has Bangladesh's pharmaceutical industry developed in recent years?

A. Bangladesh's pharmaceutical industry has recorded double-digit growth since 2010, with only the COVID period as an exception. Economic growth, higher incomes, increased healthcare spending, and better access to hospitals and doctors have boosted medicine demand, with patients now purchasing full prescribed courses. Leading companies launch 20-30 new medicines annually. The market is valued at around US$3.0 billion, 98 per cent of which is produced locally, with the remainder imported due to low demand or high domestic production costs.

Q. What key challenges is Bangladesh currently facing in its export markets?

A. Exporting pharmaceuticals is far more complex than exporting regular products. First, the manufacturing facility must be certified by the importing country's drug authority. Then each medicine must be registered separately -- a demanding process requiring a detailed dossier that includes the formulation, stability data, bioequivalence results, and, in some cases, clinical trial evidence. This makes registration both time-consuming and expensive.

In many African countries, drug registration takes at least one year and costs a minimum of $50,000 per product. Companies must also appoint local agents or distributors and establish sales and marketing arrangements.

In the United States, the process is even more rigorous, taking three-and-a-half to five years from plant certification to product registration and export approval. Registration costs alone range from $300,000 to $500,000 per product.

Maintaining certification and product registration is also costly: small firms spend about $500,000 annually, mid-sized companies over $1.0 million, and large companies several million dollars. Beximco Pharma, for example, spends around $1.5 million each year to maintain US FDA plant and product approvals.

Q. What is the current status of Beximco Pharma's export performance?

A. Beximco Pharma is the largest exporter of pharmaceuticals from Bangladesh, supplying medicines to more than 60 countries, including the USA, Europe, Canada, the UK, Australia, and other highly regulated markets. The company's annual export revenue stands at around $40 million, and its strong performance has earned it the National Export Trophy (Gold) a record nine times.

The company currently has about 500 registered products across different countries. The United States is now its key export destination, with eight products already on the market and another 12 approved for launch. To be profitable in the US market, annual revenue from the segment must exceed $10 million due to high maintenance costs.

However, securing US FDA certification significantly eases entry into other international markets by expediting product approvals.

Q. What challenges is Bangladesh expected to face after graduating from LDC status, and what measures should be taken to address them?

A. Our biggest advantage as an LDC has been the waiver on pharmaceutical patents, which allowed us to introduce new medicines to the market swiftly. After graduation, however, three major challenges are likely to emerge.

First, we will no longer be able to launch new medicines quickly, as product licences will be required.

Second, royalty claims may arise for patented medicines already introduced.

Third, countries that currently import patented generic medicines from Bangladesh may no longer be able to do so, potentially reducing export volumes.

We, along with the pharmaceutical industry association, have been engaging with the government on the implications of LDC graduation. It is crucial for the sector to stay prepared.

Q. How will Bangladesh's LDC graduation impact general consumers?

A. The impact on consumers will be twofold. First, the availability of new medicines is likely to decline. During the COVID-19 pandemic, for example, we were able to rapidly produce Remdesivir and Molnupiravir -- something that will no longer be possible after LDC graduation.

Second, medicine prices will rise. Patent holders will charge licence fees and royalties, and in many cases we will be required to source raw materials from their designated suppliers at higher costs. This will make medicines more expensive and could place essential treatments beyond the reach of many people.

Q. What is your perspective on quality control and ethical standards in the industry?

A. While major pharmaceutical companies uphold high standards, some continue to produce low-quality medicines. In rural areas, pharmacies often dispense medicines without prescriptions, highlighting the need for state intervention. No medicine should be sold without a valid prescription, and the establishment of regulated chain pharmacies is essential.

Besides, offering excessive gifts or cash to doctors is unethical, and such practices must be stopped by both parties.

Q. What are Beximco Pharma's plans for the future?

A. Beximco Pharma's future focus is on biologics, particularly treatments for cancer, chronic conditions, and rare diseases, following the global shift by multinational companies toward this segment. We aim to introduce these products in Bangladesh first.

Additionally, to mitigate the challenges of LDC graduation, we plan to register as many new products as possible before the transition so they can be recognised as pre-graduation products.