Cipla signs deal to set up first biosimilars unit in South Africa

The agreement with KwaZulu-Natal Dube Trade Port SEZ for Cipla BIOTEC's new facility was concluded during the BRICS Summit

Indian pharmaceutical major Cipla has signed a memorandum of agreement for South Africa's first biosimilars manufacturing facility to be set up at a cost of nearly $91 million.

The agreement with KwaZulu-Natal Dube Trade Port Special Economic Zone for Cipla BIOTEC's new facility was concluded on the margins of BRICS Summit in Goa, said the South African Ministry of Trade and Industry in a statement here yesterday.

The Memorandum of Agreement was signed at a meeting held at Cipla's offices in Goa which was attended by South Africa's Minister of Trade and Industry Rob Davies; KwaZulu-Natal MEC for Economic Development, Tourism and Environmental Affairs Sihle Zikalala; and Divian Govender, South Africa CEO and Global Chief Business Officer of Cipla BIOTEC.

The facility will be South Africa's first biotech manufacturing unit for the production of biosimilars. It is set to produce a range of affordable treatments for cancer and other autoimmune diseases for the African and global market.

Davies described the signing as an important milestone in the project, which was initiated when Prime Minister Narendra Modi visited South Africa in July.

"The CIPLA Biologic investment is a Top 10 priority project of the Inter-Ministerial Committee (IMC) on Investment chaired by President Jacob Zuma and is strategic for a number of reasons," Davies said.

"It resonates well with our industrial policy and puts South Africa at the cutting edge of innovation, moving up the value chain to advanced manufacturing and a knowledge-based economy. It has socio-economic benefits and strengthens our partnership with India and BRICS of developing countries providing affordable healthcare," said Davies.

Zikalala welcomed the deal, saying the project will finally make medication affordable. "As the KwaZulu-Natal Provincial Government, we welcome this investment with open arms, as the technological level of this investment has the potential to impact on a number of economic and social facets of our society, well beyond the sizable investment amount of Rs 1.3 billion ($90.76 million) in the new manufacturing facility and the 180 permanent jobs that it will create," Zikalala said.

"The investment represents the introduction of an entirely new technology into the South African economy, which will have a wide reaching impact especially the elevation of the research and development done in our tertiary education institutions," Zikalala added.

Steve Lehrer, Director and Head Cipla BIOTEC, said the project will reduce the costs of medicine. "We believe that a ground-breaking medicine is meaningless if barriers like cost and availability keep it from the patients who need it most," Lehrer added.

The construction of the new facility is scheduled to start early next year, with full operations expected to commence in the third quarter of 2018.