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The Hashemite Kingdom of Jordan & Hikma Pharmacueitcals

Presented: Alix Linthicum Lindsay Read Kristen Salierno. The Hashemite Kingdom of Jordan & Hikma Pharmacueitcals. Hikma Pharmaceuticals Overview.

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The Hashemite Kingdom of Jordan & Hikma Pharmacueitcals

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  1. Presented: Alix Linthicum Lindsay Read Kristen Salierno The Hashemite Kingdom of Jordan & Hikma Pharmacueitcals

  2. Hikma Pharmaceuticals Overview Hikma is a Jordanian manufacturer of generic drugs, primarily oral and injectable cephalosporin's (cephs), which has expanded internationally through a Greenfield plant in Portugal and an acquisition in the United States (USA). The case focuses on how sales can be boosted in the U.S. One option is to become an OEM “original equipment manufacturer” supplier to either a leading U.S. approved pharmaceutical company or to a large managed health-care organization with distribution contracts to supply hospitals. A second option is to “go it alone” by investing in developing the Hikma-owned West-ward brand in the U.S. Also in 1996 Hikma became the first Arab company to receive FDA approval.

  3. How was samihdarwazah able to build a successful pharmaceutical company in jordan? Successful steps taken: Joint venture with Italian firm to gain access to other markets Implementing Darwazah’s “3 keys to success” Realized outsourcing lacks control

  4. Why did Darwazah decide to expand Hikma’s reach beyond Jordan and the Arab world? • Out of the $60 million in sales only $10 million were from Jordan. • Hikma had experience in other Muslim markets as well as a senior manager with previous knowledge of the markets in Europe and the USA • This allowed for them to expanding with ease

  5. Appraise Hikma’s efforts to date in Europe? • Effectively and efficiently approached European market which would gain access to 330 million consumers. • New territory would create need for a central location for a plant • Research showed better opportunities in Portugal over Ireland • It only took three years for the plant in Portugal to be completed and by 1996 they were generating $10 million in sales.

  6. Why did hikma decide to pursue u.s. market? • Penetrating the United States market would increase profits because it is the largest and most competitive pharmaceutical market in the world • Hikma focuses mainly on generic drugs. In 1996 the generic pharmaceutical market was not competitive allowing for easier entry. • Generics are becoming extremely popular in the US based on the fact that they are discounted equivalents • The United States market far more open and well-organized than the Asia market. • Hikma’s manufacturing standards were comparable to the United States. • Entering the United States market was a personal entrepreneurial challenge for Darwazah because he had studied in the United States and wanted to succeed in the US market.

  7. What strategic options are open to Samihdarwazah and West-ward in the u.s.a.? • West-Ward was approached by two large competing firms offering to buy the firm’s injectable cephs: • Northaid accounted for 10% of West-ward’s sales and offered to purchase $60 million worth of injectable cephs and $30 million of generic drugs. • Sanita, had contracts with 1,000+ hospitals throughout the USA and their sales made up 20% of all hospital purchases. • Unlike Northaid, Sanitas didn’t want to purchase branded generics and wanted to put the “Sanita’s” name on the product, thus removing West-Ward from the product and from gaining recognition.

  8. Recommendations… • West-Ward should choose to work with Northaid: • West-Ward would be able to continue expanding their brand and image in the USA. • Develop strong sales and a smart distribution system in the United States.

  9. How they are doing Now 2001: Manufacturing facilities in Portugal receive FDA approval 2003: Began commercial scale production of liquid injectables 2005: Expanded into the lyophilized segment of the injectables market through the acquisition of specialized plant in Italy 2005: Listed on the London Stock Exchange 2006: Received US FDA approval for the manufacturing facilities of Jezeera Pharmaceutical Industries (JPI), then our associate business in Saudi Arabia 2006: JPI becomes a wholly-owned subsidiary following acquisition of the 52.5% share in JPI that Hikma did not already own 2007: Expanded into the German generic injectable oncology market through the acquisition of Ribosepharm GmbH 2007: Acquired Thymoorgan, a German contract manufacturer of injectable oncology products, thereby building an integrated oncology platform Major goal is to continue expanding their geographic reach

  10. The Hashemite Kingdom of Jordan • As of July 2009 • Population: 6,342,948 • 2.264% Growth Rate • 31.3% of the population is 0-14 years old.

  11. Education • A school is provided for every • village with 10 or more “school-going” • children • 4,347 Schools • 2,787 government schools • 1,493 private schools • 48 community colleges • 19 universities • Enrollment reached over 95% in 2008 • Higher education either through graduate schools, abroad, community colleges, industry specific programs, etc • 90% of their population over the age of 15 can read and write.

  12. Economic statistics • Lower middle-income country (World Book) • GDP estimated $31.01 billion (2008) • $5,000 GDP per capita • GDP real growth rate 4.5% (2008) • Services industry makes up most of their annual GDP, 86.3% • Industrial takes up 10.1% • Agriculture at 3.6%.

  13. Geography • Location: Middle East • Neighbors: Saudi, Arabia, the West Bank, Syria, Iraq and the Gulf of Aqaba • Area: 92,300 sq km • Climate • West: Mediterranean (25%) • Rest: Desert (75%) • Topography: • East: desert plateau • Northwest: highlands • Cultivatable Land: 3.32%

  14. Geography Cont’d. • Most of Jordan is part of the Syrian Desert. Sand dunes take up much of the scenery in the south • The Dead Sea is the lowest body of water and point on Earth; reaching more than 825 meters below sea level. • The water in the Dead Sea contains about 250 grams of dissolved salts per liter at the surface. Floating is effortless

  15. Political system • Constitutional monarchy • King Abdullah II (bin al-Hussein) • Prominent political party: Islamic Action Front (branch of Muslim Brotherhood) • Muslim Brotherhood: movement that opposes Islamic nations, wants to return to precepts of Qur’an and rejects Western influences

  16. Political system Cont’d. • Political parties represent 4 sectors: Islamists, leftists, Arab nationalists & conservatives. • 30+ licensed political parties • 2007 Legislation implemented new criteria (500 member minimum, etc.), weeding out smaller groups • Jordan National Party is the only party led by a woman • Islamic Liberation Party (Communist) is the only banned party

  17. Legal System • Legislative branch (Parliament): • House of Notables 40 members • House of Deputies 80 members • House of Deputies, seats divided: • 6 women • 9 Christian candidates • 9 Bedouin candidates • 3 Jordanians of Chechen or Circassian descent • 53 left open • House seats are served for 4 year terms

  18. Legal system cont • Judicial Branch of Jordan is constitutionally guaranteed independent • Judges are appointed and dismissed by the King, supervised by the Higher Judicial Council and the Ministry of Justice occasionally provides recommendations • Court system is divided into three sectors: civil, religious and special • Civil courts deal with all matters pertaining to the civilian and criminal matters • Religious courts primarily deal with issues such as marriage, divorce, child custody, etc • Special court deals with military and higher order procedures.

  19. Religion • 92% of Jordanians are Sunni Muslims, and about 6% are Christians • Christians belong to the Greek Orthodox Church, but there are also Greek Catholics, a small Roman Catholic community, Syrian Orthodox, Coptic Orthodox, Armenian Orthodox and a few Protestant denominations found mostly in Amman. Several small Shi’a and Druze populations can also be found in Jordan, which makes up around 2% of the population

  20. Living conditions • Mealtime: social gathering • Jordanian food; mostly grilled shish kebabs, stuffed vegetables, meat and poultry, • Staple food is, khobez, a large, flat bread. • Breakfast: • fried eggs • labaneh (soft cheese) • zaatar (spice/herb sauce) • olive oil • tea. • National dish: Mansaf • lamb sautéed in a sundried yogurt sauce served on top of rice…delicious

  21. Living Conditions • Use many different spices and sauces. • Mezze (meal layout): • “30+ small dishes served together.” • smaller appetizers and salad type dishes • Drinks: • Coffee, normally favored strong with cardamom seeds. • Wine and spirits, generally served with water & ice.

  22. Living conditions • Pastimes: • Participating & watching sports. • Popular sport: • “football,” (soccer), volleyball and the Dead Sea Marathon. • (usually has 1,500+ participants from around the world.) • Tennis is highly viewed rather than participated in • Clothing: • Muslim women are rarely seen without their arms, legs and hair covered and although western women are not subjected to the customs, they rarely wear revealing clothing. • Conservative dress is advised for men and women

  23. Language • Official Language: Arabic • Modern Standard • Classical • Local • each contains many dialects • Other Languages: • Many middle/upper class citizens are fluent in and regard English as their 2nd language • French is taught in school • Russian is primarily understood by the older generation • Armenian, Circassian, Chechen, Adyghe(North Caucasian), Levantine Bedawi, NajdiDomari and South Levantine. • each having many dialects

  24. Estimated Consumption • Market Size: $896 million (1997) • Exports: $6.521 billion f.o.b. • Commodities: • clothing, fertilizers, potash, cement, light manufacturing, phosphates, vegetables & pharmaceuticals • Agricultural products: • olives, apricots, melons, strawberries, figs, citrus fruits, cucumbers & tomatoes. • raise sheep, goats & poultry. • Huge tourist industry because of the diverse culture & country’s beauty • include: deserts, historic monuments, culture, beach resorts, hot springs, resorts, spas, etc…many found at the Dead Sea • Imports: $15.65 billion f.o.b., • Primary imports: crude oil, machinery, transportation equipment, iron & cereals.

  25. Estimated Consumption • Estimated Consumption = $31.01 billion + 15.65 billion - $6.521 billion • Total 2008 Estimated Consumption = $40.139 billion

  26. Questions?

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