Ugandan entrepreneur extraordinaire, Charles Mbire, has not popped the champagne yet. He'll be celebrating soon enough though yet another triumph in a long line of accomplishments that has marked the man. After a few years of research and development, laborious deal-making, and downright hard manual labour, his business partners and management team at Afro-Alpine Pharma Limited (AAPL) are ready to harvest the anti-malarial herb, Artemisinin, in the sub-tropical Kabale district of Uganda.
The story is not exactly front page news not yet anyway. But if Mbire gets the marketing of the drug in Uganda on stream as planned, it might very well become a blockbuster. With the manufacture of the drug projected to retail at $2 per treatment compared with $8 on the international market, AAPL is a front-runner in a desperate bid to bring the novel compound to market in a rollout plan that could net millions of US dollars, eventually.
Money does matter after all. But that's not what inspires Charles Mbire to wake up every morning. Like his involvement in, and stewardship of, MTN Uganda and the myriad other business ventures in which he's been known to dabble, he didn't come to AAPL for the rich stock options, free cappuccinos or glitzy staff parties. Far from the glamour and glitz, Uganda was always going to be enormously risky business in which few experimental compounds make it to a desolate market.
Mbire joined AAPL as a shareholder because the company would help him solve the biggest problem facing Uganda and the rest of the continent. The extraction process is a complicated one, but, very simply, if he succeeds in manufacturing the Artemisinin compound, artemether, on a massive scale he would have achieved nothing short of a medical milestone a first line of treatment known as Artemisinin-based Combination Therapy (ACT) against malaria. The results have shown an unprecedented 98 percent efficacy in Vietnam in fighting the dominant strains of the malaria parasite, a scourge that is arguably bigger than HIV/AIDS.
And as if to end any lingering doubt, some 7500km away in the tropical-medicine wing of Mahidol University's hospital in Bangkok, a laboratory experiment late last year on the blood of a malaria patient by the chief of development for India's largest drug company saw almost no malaria parasites where just two days earlier there had been hordes of them. Artemisinin, an ancient Chinese fever remedy, is thought to work by reacting with itself to the iron in red blood cells. When the parasites invade, the drug attacks them and they die. Because the drug works quickly, then dissipates within a few days, it is combined with longer lasting synthetic compounds manufactured in tablet form. The final product ACT destroys residual parasites.
Which is what has Mbire all fired up. He says ACT offers hope to malaria patients, some 500 million of which are now afflicted with the parasite annually up from 25 million in 1997 , 80 percent of the total number of recorded cases in Africa alone, according to a survey by the World Health Organisation (WHO).
The reason for the staggering rise, says Mbire, is that the parasite in African countries has mutated over the years, so much so that it's become resistant to traditional Western medicinal remedies such as cloroquin, mefloquin and a combination of sulphadxine-pyramethamine.
Add to that the fact that conventional WHO-approved medicines can set you back roughly $35, and Mbire's enthusiasm for ACT needs very little explanation. Death is writ large for millions who fall foul of malaria, not because there's no cure, but because there's been no aggressive commitment by huge multinational pharmaceutical companies to manufacture ACT on a massive scale at an affordable rate to the average African.
Fact is, industry wide, 90 percent of drugs in clinical development never reach the market, including half of those that make it to late-stage clinical trials. That's probably why so many big drug companies are running out of new drugs.
But the total cost of developing the drug, which could reach millions of dollars, is remarkably little compared with the hundreds of billions of dollars Western companies typically spend on a new remedy.
In the scheme of things, a disease of the poor is not an obvious choice for Western pharmaceuticals. It's estimated that the value of the global anti-malarial market is $400mn a year, including Western travellers heading into malarial regions far smaller than the whopping $1bn scale needed for a blockbuster. Sales on ACT would therefore be far less, particularly since it would have to be provided to the poor at minimal cost.
So the ACT drug is small fry for Western pharmaceuticals who would rather invest their R&D budgets on propriety drugs for Western markets with typically Western problems with huge returns of course.
Scoffing at big Western pharmaceuticals has therefore become something of a rallying cry at AAPL: Using market data or return-on-investment analysis to drive the business is strictly taboo. At the end of the day, we want to make drugs to cure malaria, says Mbire.
That's the transcendent issue. Not that this company considers itself a uniquely philanthropic endeavour. In the end, business drives business; Mbire acknowledges this.
The strategy: Fund a massive rollout of the drug, ideally at a subsidised rate of $1 per treatment, and the volume of sales will eventually equal affordability.
Mbire's investment in AAPL is not purely accidental, however. His personal agenda is something of a libertarian crusade to save lives, with the business side of things the enabler. After suffering the gut-wrenching physical trauma of the disease, Mbire who, unlike most ordinary Ugandans, was fortunate enough to have had recourse to effective treatment, was on the prowl for something that would make a meaningful difference to peoples' lives.
Uganda, with its tropical rains, was Vietnam's climatic clone. There's a runt joke about an old man with a walking stick, Mbire says, cracking up the ceiling of his office with laughter. He stood still long enough for his walking stick to grow roots. Or, the witty one-liner, If you throw a button in the ground it will grow a shirt, he quips, laughing all the while.
Mbire recalls being asked whether he'd be interested in a malaria solution that would make it cheaper and easier to scale up and soon found one of his companies, Sunco Limited, in a partnership with the Asian-based firm, Afro-Pharma, that would see the launch of a $4,2mn project for the production of Artemisia annua, the compound used in the Artemisinin derivative, artemether.
Chauhan, now the Afro-Alpine managing director, says $2,2mn was injected in the cultivation of the crop in Kabale, Kisoro, Kanungu, Ntungamo and Rukungiri districts. The business model was a deductive logic of necessity eliminating choice: Whereas the raw material was produced in China and Vietnam, shipped to Europe and hit the shelves of pharmacies here at $8 per treatment, we're producing the drug from A-Z at an affordable price to the poor,says Chauhan.
Now it's almost harvest time and Mbire's even willing to let the poor have a slice of his stake in AAPL in his campaign to ultimately give the poor free treatment.
This centrality of human life in Mbire's estimation of things is perhaps his key character trait. There's nothing flamboyantly shrewd and elusive often the case with business moguls about the man. Interviewing him in his Kampala office, with his temperate disposition and calm voice, is like having a long chat with an old friend. It's easy for a discussion about human tragedy to morph into a fascinating narrative on cellular telephony as a development agent, or empowering people to fish for tilapia (a staple dish in Uganda) in fishponds in their backyards.
And that's not just hot air. He's been there, done that all in a dizzying run of investments over the years. A business whiz with an Honours degree in economics from Essex University and MBA from Liecester in the UK, he's dazzled the East African business community with his deal-making and slew of complex financial transactions.
He started his career in 1985 as managing director of Pop-In Industries Limited and four years later moved on to become the Uganda resident representative of the Hyundai Corporation.
After a 6-year stint there he became chairman of Uganda Inflight Service Limited, a joint venture between Uganda Airlines Corporation, Fecis (Pty)Ltd, Efforte Corporation and Sunco Limited before becoming Chairman of the Board of Directors of MTN Uganda in 1998 in a joint venture between MTN (Pty)Ltd, Telia AB (Sweden), Tri-Star SARl and Mbire's investment company, Invesco (Uganda) Limited.MTN, he says, was the clinch. For one thing, it allowed him to pursue an obsession: human development and empowerment.
On this elementary economic logic, MTN, at the behest of Mbire, took a gamble in Uganda's largely informal market where other mobile service providers threw caution to the wind.
His timing seemed impeccable. We had another operator in the country charging $2500 just to get connected. They would also close on a Saturdays and Sundays and there was no aftercare service, he says. The result: A large segment of Uganda's informal market was untapped; beyond the chimera of orthodox risk analysis, a competitor was opportune.
To Mbire, true innovation takes guts: The soft underbelly of what was, in essence, an expensive and uncompetitive monopoly was an opportunity to reload. So he geared up what became his signature investment arm, Invesco (Uganda) Limited, and looked for a company that could exploit the market with an affordable and resourceful offering to ordinary Ugandans.
As for spin-offs, take a drive out of Kampala towards Entebbe, and roadside bazaars nestle alongside a blur of squat makeshift cellular outlets bearing the yellow MTN signature as far as the eye can see.
Indirectly, MTN employs more than 15000 people and, with 1,5 million active phones on its database, is the biggest taxpayer in the country an estimated 97 billion shillings over the past 7 years.
True, a rough calculation of 1,5 million phones charging on average once a day at the average electricity unit cost nets roughly $750000 a day in revenue.
That's a small fortune in an underdeveloped economy. But the development spin-off is a lot more gratifying. Mbire's face beams with adoration for an ailing woman in a rural village who, because of the parlous state of infrastructure and exorbitant cost of a medical consultation, had no recourse to basic medical care.
The woman's son, a general practitioner living in the US and long-time friend of Mbire's, whom she'd not talked to in five years, sent a parcel of clothes a couple of years ago and asked Mbire to deliver it to her.
Mbire handed her a phone, taught her to use the gadget and not only is she getting free telephonic diagnoses and medical prescriptions from her son, she's also renting her phone to villagers at the cost of a call and turning a pretty penny as a small-time entrepreneur.
By this time Mbire was already toiling away on several value-adding projects, including the possibility of starting a helicopter charter service on a lease arrangement in Uganda to fill the vacuum.
Around the same time he was well under way with his next deal, a joint venture between local fish processor and exporter Ngege Limited, Mbire's Sunco Investments and Genomer Uganda, a subsidiary of Norwegian Firm Genomer, one of the world's leading life science-based aqua-cultural companies.
After that came East Africa Fish Farming Limited, another joint venture between Seatankec, a Norwegian fish farming company, the Uganda Commercial Fish Farmers Association and Mbire of Polino Holdings Limited to invest in a fish farming initiative to establish hatcheries, fish farms, and a processing plant for the cultivation and export of fish.
As wacky as it sounds, Mbire now has his sights on fishponds for each Ugandan household. That would be the ultimate winning scenario. Think about it, a fish pond in your back yard is a source of subsistence, he says, intuitively.
The real problem has always been the cost of manufacturing the ACT tablet. Four Western pharmaceuticals have historically had a monopoly as the only WHO-approved agents for the drug ACT. That's ironically made the drug inaccessible to the poor who need it most,says Chauhan.
But at the very least, AAPL now has the blessing of the World Health Organisation which has approved the use of the drug combination containing Artemisinin compounds after Novartis Pharma AG, the previously approved pharmaceutical to produce its co-formulated artemether product, Coartem, to WHO for supply to the public sector of malaria-endemic countries backed out in 2001.
Trouble was Norvatis's failure to honour its pledge to produce 60 million treatment courses of Coartem because of the shortage of artemether from its Chinese and Vietnamese suppliers.
The real opportunity for AAPL may be in breaking traditional alliances with Western pharmaceuticals and forming partnerships with Asian pharmaceuticals hungry for new compounds.
The potential to expand beyond Uganda to other African countries and export markets is huge. According to latest WHO estimates, the world needs 500 million ACT treatments. In 2005 WHO only produced 60 million treatments simply because of a shortfall in supply of the raw material.
AAPL does have much grander plans than simply to become part of the global production pipeline and cost structure of the pharmaceutical industry.
Mbire and his partners have already met half the challenge: producing artemether in large quantities, large enough to bring the cost per treatment to affordable levels to the poor in Uganda.
Which is the other half of the challenge: for AALP to slide into the gap created by Norvatis's departure from the scene. That left only a handful of WHO-approved companies in the world that understood the necessary chemistry of the drug and distribution network in Africa. An early ally was Cipla which had used a similar process to produce a synthesised version of Artemisinin called RbX11160 in India and had a distribution network for AIDS drugs and other generics in the developing world. In fact in the late 90s Cipla was praised for defying big pharmaceutical patents and selling generic versions of AIDS drugs cheaply in Africa, charging $2 instead of $50 per treatment.
Charles Mbire is part owner and member of the Board of Directors of the following Ugandan businesses:
1. Afro Alpine Pharma Limited
2. East Africa Fish Farming Limited
3. Ecobank Uganda Limited
4. Eskom Uganda Limited
5. Invesco (Uganda) Limited
6. MTN Communications Uganda Limited
7. Polino Holdings Limited
8. Sunco Investments Limited
9. Bomi Holdings Limited
10. Rift Valley Railways
11. Chui Investments Limited
Dr. Charles Mbire scoops Lifetime Achievement Award 2013
MTN Chairman Dr. Charles Mbire has been honoured with an Award as the most Respected and Inspiring Business Leader in Uganda in the Pearl of Africa Lifetime Achievement Award 2013. The ceremony which took place at Imperial Royal Hotel Kampala was presided over by the Prime Minister of Uganda Hon. Amama Mbabazi.
Dr. Mbire’s name is synonymous with successful businesses in Uganda including MTN Uganda.
Dr. Charles Mbire remained a consistent, astute and honest businessman, entrepreneur and industrialist in Uganda. He is reported to be the wealthiest indigenous Ugandan, with an estimated net worth in excess of US$65 million, as of December 2008
Mbire traces his origins to Mparo, Kabale District, in southwestern Uganda. He studied business and economics and graduated with Honors from Essex University in England. He went on to obtain a Master of Business Administration (MBA) from Leicester University, also in the United Kingdom. His investments range from telecommunications, finance, energy, real estate, pharmaceuticals, agribusiness and transportation.
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