is the country set to become a global biotech hub?

In the last year or so, there have been a number of indications that Saudi Arabia is setting itself up to become a global biotech hub. Over the next decade, it is expected to become a world leader in biotech research and generate significant economic growth. 

The most recent indication of Saudi Arabia’s progress toward becoming a world-leading biotech hub came in December 2024 when more than 30,000 pharma professionals attended the inaugural Convention on Pharmaceutical Ingredients (CPHI) Middle East at Riyadh Front Exhibition & Convention Center. This was the largest-ever gathering of pharma companies in the region, and industry leaders predict that this first CPHI event in Saudi Arabia will help speed up efforts to establish a robust domestic manufacturing base. 

Furthermore, a 2023 report by Strategy& Middle East, part of the PwC network, entitled “Accelerating Saudi Arabia’s Biotechnology Sector”, suggested that Saudi Arabia has the potential to become a global hub for biotech research, development, and pharmaceutical manufacturing, driving economic diversity, as well as addressing national healthcare and food security. 

“The current state of the Saudi Arabian biotech industry could be described as ‘nascent’, if the term ‘industry’ is simply viewed by its narrowest definition as a private sector enterprise. Rather, in the context of its economic transformation program, the Kingdom has focused on creating a suitable environment for the evolution of a broader biotech sector, with a productive interplay between public and semi-public institutions, and the first initiatives of private companies in the field,” commented Claudia Palme, senior executive adviser, and Irfan Merali, partner, at Strategy& Middle East. 

“Specifically, there have been, and continue to be, several efforts to establish the essential prerequisites of any science and talent-based sector. This includes establishing renowned academic institutions and structures of research funding, the development of state-of-the-art infrastructure serving biotech fields, supporting students and researchers in their academic careers, and the systematic review of regulations in relation to biotech and the business climate in general.”

Becoming a leader: Saudi Arabia launches National Biotechnology Strategy 

According to Sandeep Sinha, head of healthcare and life sciences at JLL MEA, Saudi Arabia’s Vision 2030 initiative – which is a government program that was launched with the aim of achieving the goal of increased diversification economically, socially, and culturally, and reducing dependency on oil revenues – puts a strategic emphasis on fostering high-tech industries through localized manufacturing and private sector investment, with the government’s commitment to bolstering the life science sector extremely evident.

Connected to its Vision 2030 initiative, in January 2024, the country’s government also launched its National Biotechnology Strategy with the aim of cementing the country’s position as the MENA (Middle East/North Africa) leader in biotechnology by 2030 and transforming it into an international biotechnology hub by 2040.

According to the official Vision 2030 website, the National Biotechnology Strategy builds on Saudi Arabia’s existing strengths, including access to robust capital, a large market, the government’s commitment, and a unique gene pool, all with the goal of advancing Saudi Arabia’s capabilities across four strategic areas: vaccines, bio-manufacturing and localization, genomics, and plant optimization.

As part of this national strategy, the country took another step forward in December at the aforementioned CPHI event, where the Ministry of Industry and Mineral Resources, in collaboration with the Ministries of Investment and Health, signed a memorandum of understanding with American giant Vertex Pharmaceuticals to enhance the biotechnology sector by localizing gene therapy manufacturing in the country, transferring knowledge, and developing innovations and research locally.

Specifically, the partnership aims to help achieve Saudi Arabia’s goal of becoming a global biotechnology hub by 2040 and is expected to attract investments of up to SAR 1 billion ($266 million) to the country over the next five years.

The promise of Saudi Arabia’s biotech sector 

As per 2023, Saudi Arabia had already spent $3.9 billion in investment in R&D since 2021 and boasts several institutions focused on science and technology, such as KAUST (King Abdullah University of Science and Technology), KSU (King Saudi University), KACST (King Abdulaziz City of Science and Technology), King Abdullah Institute of Medical Research (KAIMRC), and King Faisal Specialist Hospital and Research Center (KFSHRC). 

Furthermore, according to Palme and Merali, the country is also establishing a new hub for scientific and commercial activities in NEOM – the country’s ‘city of the future’, if the project eventually achieves completion – and KAIMRC and KFSHRC connect their research centers with their own top care hospitals, serving the larger Middle East region. This allows researchers to have access to “a reservoir” of patients and practicians for clinical trials. 

Plus, innovation initiatives like the Saudi Human Genome Program and the Saudi Network for Clinical Trials are also helping clinician-researchers, as well as commercializing potential new technologies.

Some of the aforementioned institutions have also made extensive investments in infrastructure. “These institutions offer substantial state-of-the-art infrastructure with spacious labs. They are equipped with standard lab equipment to sequencers, and even a batch-size manufacturing line in KACST; a stark contrast from the often-squeezed spaces in Boston, Munich, or other global hubs. They also train a generation of new scientists from one of the youngest national populations globally,” explained Palme and Merali. 

They also pointed out that Saudi Arabia is entering the global biotech stage at a time when multiple factors are working in its favor. For example, the current focus on genomics and cell and gene therapy (CGT) in medical research happens to align with the Kingdom’s genetic makeup and high incidence of genetic diseases. This creates a need in the country for players in CRISPR and similar technologies.

Meanwhile, the negative impact of climate change is another factor that necessitates arid climate agriculture, which is currently being pursued in Saudi Arabia. 

“Additionally, Aramco’s status as the world’s largest company provides the Kingdom with a unique opportunity to drive industrial biotech applications, as well as utilize its expertise in addition to SABIC (a chemical manufacturing company) to launch new products in fuel, energy and materials markets,” continued Palme and Merali.

“Traditional biotech markets are also grappling with a scarcity of talent, requiring the exploration of new talent pools. The downturn in capital markets over the past year also enables the Kingdom to acquire strategic technology platforms and product pipelines for its industry at the best of conditions.” 

And, finally, stated Palme and Merali, the geopolitical shift of powers like China and India away from Western markets and partners has increased their interest and activity in Saudi Arabia, opening up more partnership opportunities for the Kingdom.

Four key enablers 

In its 2023 report, Strategy& Middle East laid out the efforts needed in Saudi Arabia to spark and accelerate entrepreneurial activity and commercial investment into biotech, citing four critical factors for this – or four ‘enablers’. 

The first enabler involves securing public and private funding in the industry. “…Beyond research grants, this is especially the establishment of venture capital funding by setting up local (state-backed) funds and attracting international biotech VCs [venture capitals] to set up in the country and support these new funds and local start-ups,” explained Palme and Merali.

The second enabler is to expand human capital and the talent pipeline, which, starting from primary school, encompasses a comprehensive focus on STEM disciplines, continued with biotech-relevant enrichment for talented individuals, revamped university curricula, new degree programs, etc. According to Palme and Merali, this will help to create a talent pool for local and international players. 

However, it’s worth pointing out that gender inclusivity in STEM disciplines, and education in general, is still very much lacking and women are yet to achieve equal opportunities to men. Vision 2030 aims to create 1 million jobs for women, and if Saudi Arabia truly wants to become a global biotech hub, it will need to commit to this promise and improve gender equality in the country.

Third on the list is the continued development of state-of-the-art infrastructure, including digital resources and tools such as artificial intelligence (AI).

And, finally, the fourth enabler, is the creation of a strong framework of regulation and incentives: “While already ongoing, this regulatory ecosystem for the biotech industry will need continued flexibility and innovation to keep pace with scientific development, as well as the intense global competition to attract biotech ventures,” commented Palme and Merali.

“We believe that Saudi Arabia has a unique opportunity to make biotechnology a cornerstone of its post-oil economy if these four elements can be put into place.”

Challenges still lie ahead

Of course, as with any country that is looking to emerge as a world leader in biotech research, certain challenges lie ahead; ones that go beyond simply trying to succeed at putting the ‘four enablers’ into practice. 

“…The relatively higher capital requirements for establishing manufacturing facilities could be a possible deterrent to potential investors, when compared to other regions like APAC. The integration of Saudization requirements, aimed at enhancing the local workforce, presents a transitional hurdle in terms of skill availability and efficient implementation.” said Sinha.

“Moreover, the success of joint ventures hinges on navigating licensing agreements between parties and government agencies, alongside concerns surrounding the maturity of intellectual property rights. These factors could potentially impact the nation’s pursuit of self-sufficiency in the life sciences sector.”

Additionally, there is no getting away from the fact that Saudi Arabia has major human rights issues. In November, Saudi dissident Yahia Assiri, who founded the NGO ALQST for Human Rights in the U.K., said that the human rights situation in the country is “the worst ever”. Ultimately, this could be extremely off-putting to international investors and partners who would otherwise be interested in investing in biotech in Saudi Arabia. 

But if the country manages to resolve these problems, as well as its gender equality issues, there is no denying the biotech industry holds vast growth potential and there is no reason why it could not become one of the key hubs in the MENA region in the next decade.