Dr. Shahab Q. Khokhar is a Founding Director at DRK Pharma Solutions. He is also a Founder Partner at Knightsbridge Capital Group, a leading private equity investment firm with projects under management worth over $70 million. Dr. Khokhar was also a Partner at Winsome SA (Switzerland), a venture capital / private equity investment firm. Dr. Khokhar has also been on various Boards of the Government of Punjab (Pakistan) in the sectors of health care and technical vocational & skill development. He has also been a visiting faculty at the Lahore University of Management Sciences (LUMS).
Dr Khokhar received his Ph.D. in Mathematical Finance from King's College, University of Cambridge (UK). BR Research recently met Dr. Khokhar at DRK Pharma Solution's office in Lahore. Following are the edited transcripts of the conversation:
BR Research: Tell us about DRK Pharma Solutions.
Shahab Q. Khokhar: The pharmaceuticals have two main silos: the originators or those who create a drug, and the generics that can make the same drugs after the patents expire. There are also biopharmaceuticals that are both originators and have generics called biosimilars. There was a need to do something new here in Pakistan – away from the generics. So, we took a strategic review of the core competencies we have in the healthcare and pharma space in Pakistan. Basically, we analyzed what we can offer to the world. In Pakistan, we don't have originators as a chemical entity innovation is, on average, at least a billion-dollar exercise.
What I would like to highlight here is that drug development process has a very large value chain. It consists of synthesizing the chemical in a lab and testing its safety in animals, followed by clinical testing to generate a First Phase trial on healthy volunteers to gauge toxicity/safety. Subsequently, Phase Two trials are conducted on patient groups, which are then followed by testing the drug on a larger sample size of patients comparing it with the already available gold standard treatment, after which the product is actually launched. So if chemical synthesis, to come up with a new drug is a severely expensive investment, what about clinical trials that need volunteers and, most importantly, patients? I have always believed that our population size is our USP in all sorts of business opportunities.
So we started looking into this opportunity. As per some protocols of clinical trials, the patient should not have received any sort of prior therapy to treat the disease on which the trial is being conducted, another advantage that a country like Pakistan has because of its population of over 220 million people with a large number of treatment naive patients.
DRK Pharma Solutions became a reality, thanks to the visionary leadership of Dr. Abdul Qadeer Khokhar, a renowned research scientist, educationist and a successful entrepreneur with over 4 decades of contributions to the pharmaceutical sector in Pakistan.
Together with Dr. Atif Mirza (President Clinical Operations at DRK), who was running the clinical trials for a multinational pharma company prior to DRK, we decided to venture into this niche market forming a team that had 15 years of experience in this field. Today, DRK Pharma Solutions is a premier solutions provider to the pharmaceutical and biopharmaceutical industries in the areas of clinical research, bioequivalence and lab-scale product development providing GMP & regulatory affairs consultancies for the Stringent Regulatory Authorities (SRA) and Pharmaceutical Inspection Co-operation Scheme (PIC/s) standard markets.
BRR: You are also into generic product development. How is that any different from any other pharmaceutical company?
SQK: Yes, at the same time, we also decided to go into contract generic product development as our team had decades of product development expertise. This involved R&D, which was absolutely non-existent in Pakistan. We also identified that the generic drug development that was being carried out in the country did not follow the global requirements and protocols. This is one of the major reasons why there is no US FDA and EMA approved pharmaceutical companies in Pakistan. We identified this gap and tied up with R&D specialists internationally. Today, we are developing lab-scale generic products in coordination with European and American companies.
DRK Pharma Solutions has been exhibiting internationally at CPhI Worldwide for the past few years and works closely with the parent office of the company in Switzerland and the satellite office in the UK.
BRR: Do you have your own brands?
SQK: Zero. DRK Pharma Solutions is only a contract service provider. At some point in time, we might consider developing formulations for out-licensing to generic pharmaceutical & biopharmaceutical companies. In biosimilars as well, we have tied up with experts in the US where our aim is to start all the way from the back-end, right from DNA sequencing. We are also tying up with South Korean firms that are the leaders in biosimilars. We won't have our brands precisely because having our own brands would create a conflict of interest.
BRR: Coming back to the clinical trials, how have you progressed?
SQK: We started approaching companies for clinical trials in 2016. In the meantime, the government came up with Bio Study Rules 2017 after 2011. The key feature of the new rules was to align local regulations with the international requirements. This was necessary because most customers for clinical trials are the big global pharma companies and global biotech. There is no local market for Phase II-III trials as there are no new chemical entities being developed here.
It took a lot of persistence and hard work to get all the key stakeholders to recognize the importance of this extremely important area. And now, DRK Pharma Solutions has become the first company to get the license to act as a Clinical Research Organization (CRO) in Pakistan by the Drug Regulatory Authority of Pakistan (DRAP) under the Bio Study Rules 2017. Thanks to DRAP, Pakistan can now contribute towards the development of new drug therapies, and, at the same time, export clinical research services.
While we worked towards obtaining the license, we continued to further improve ourselves by training our team on global practices and guidelines. We enhanced our business development work and approached top global CROs for inclusion of Pakistan in their portfolio of the countries where they conduct their research. And that went very well. After pursuing them for quite some time, we were able to bring in top CROs and large global pharma companies to Pakistan. They decided to, and conducted audits of DRK Pharma Solutions where our team stood and delivered leading to DRK being qualified. This gave us waves of confidence. Our pitch has always been, ‘Why Pakistan?' because the research data has to come from Pakistan – be it the demographics, the population, or the patient groups.
BRR: Do you have an estimate of this clinical trial market globally?
SQK: The clinical trial space is globally valued at $40 billion, growing at a healthy CAGR of 5-7 percent. Globally, these trials are becoming more and more challenging because of the non-availability of patients. India is close to $1.6 billion, growing at a faster pace than the global CAGR and is expected to double its market share by 2025. Malaysia and Vietnam have also been very aggressive when it comes to clinical trials and biotech.
I would reiterate here that our population, hence patient groups, is the natural resource we have that is becoming scarce and limited in the rest of the world. Secondly, we also have patients with rare diseases. And thirdly, we don't have to face the language barrier challenges like Vietnam did. The only translation required is for patient consent form. If we compare the infrastructure required for clinical research, it is similar to the Asian countries doing clinical research. On top of that, this is purely an export oriented field, where the proceeds for a clinical trial conducted for XYZ comes in as export receipts. Moreover, compared to the pharma sector exports of around $200-225million, that mostly has all inputs, raw material, and technology imported, the clinical trials have zero imports. It is largely a service based sector with local inputs.
BRR: Where do you see this sector in the next five years or so?
SQK: If we play our cards right, and if the regulators and the government supports this sector, we should be able to achieve 10 percent of India's market in the next 5 years, which is around $150-200 million – close to the existing pharma industry exports.
The sector also has many ancillary industries, prospects of which are also very promising like medical writing, data management, bio statistics, pharmacovigilance etc. Medical writing is different from transcription of prescriptions in that it involves writing the synopsis and research papers of a clinical trial. And pharmacovigilance is the practice of monitoring the adverse events of medical drugs during or after the clinical trials, especially in order to identify and evaluate previously unreported adverse reactions.
We are now also looking into rescue studies. A rescue study is a clinical trial that is stalled in its start-up phase, or having trouble engaging sites or enrolling patients. We also have plans to set up a Clinical Research Association in Pakistan for the promotion of the sector.
Our vision is very clear. We want to become a regional player and expand through global acquisitions and mergers. Our objective is to bring Pakistan on the world map for clinical trials.