Episode’s transcript

Julio Martinez: 0:00

Welcome to the Latin MedTech leaders podcast. A conversation with MedTech leaders who have succeeded or plan to succeed in Latin America. Please subscribe on your favorite podcasting platform, apple podcast, Spotify, Google podcast. Amazon music is teacher tune in. I heard radio Pandora or today. Our guest is Eduardo Valencia, founder of Parque pharma, an almost 20 year old company in Mexico, focused on the design construction and operation of facilities dedicated to the manufacturing of drugs, medical devices, cosmetics, and other medical products. Eduardo is great to have you here today. Welcome to the show.

Eduardo Valencia: 0:45

Thank you very much, Julio. It is a real pleasure to be able to talk to you and to your great audience.

Julio Martinez: 0:53

Awesome Eduardo. All right, so let's get started and it beautiful afternoon, uh, talking about your journey to where you are today. Uh, I'm sure you have a fascinating story and, um, you are based in Mexico and, uh, you have over, I don't know what 30, 40 years of experience in this industry building, um, plants and manufacturing facilities. So tell us about it please.

Eduardo Valencia: 1:22

Great. Uh, well, I am a civil engineer by, uh, the national university of Mexico city and, uh, I started, uh, building, uh, back in 1981 and, uh, I founded my own construction company and, uh, we have built up to now in more than 37 years of experience, more than, uh, 300 projects successfully. And, uh, back in 1996, we decided as a strategic decision to go into the pharmaceutical industry, uh, as a design builder company. So we, we, uh, really applied to learning the language, uh, of pharma and learning the, uh, secrets of designing and building, um, uh, pharmaceutical facilities. And we had the, the opportunity to design and build a number of, uh, facilities in Mexico, mostly in Mexico city for, uh, multinational companies. And that was between 1996 and, uh, 2002. And we also had the opportunity to learn about the, to have a, uh, a deep, uh, knowledge about the industry, uh, in Mexico. And we learned that, uh, there, there was, uh, there was not a real estate, um, market for, uh, that could offer facilities, uh, for sale and much less for, for lease. So, uh, back in 2003, we created, uh, group in Mo pharma, which is, uh, our company too. And, uh, our brand name is PAMA. And so we built this project in Toluca, which is, uh, less than an hour from Mexico city and a very industrial city with a lot of pharma companies in there. We built this, uh, multi-tenant project focused into, um, offering this, uh, up to then nonexistent, uh, real estate market for, uh, life sciences project. So, uh, that's how we, we got here and we have had, uh, a very interesting, uh, combination of tenants up to now, uh, from Europe, uh, an Italian company from us. We, we rented a mini facility for Pfizer for nine years, and, uh, we have, uh, also, uh, Latin American, uh, important companies, uh, as tenants. So, uh, we that's, that's our background, that's our journey up to now.

Julio Martinez: 4:54

Excellent, excellent, beautiful journey, uh, because you found a niche, right. And, uh, you have Excel apparently in that niche. Is there any other company doing the same thing or similar thing, or are you the only, no,

Eduardo Valencia: 5:06

Uh, in fact, uh, we are the only one in Mexico. Wow. And for a number of years, we, we tried to find, uh, companies doing the same or similar things internationally. And, uh, just last year we were able to, to learn about a couple of companies doing something very, very similar in the us one in Massachusetts. And I guess the other one is, uh, in the San Diego area. And then, and these are last few weeks. We have learned about a company in the Spain that is, uh, finishing the first phase, the first construction phase of a project that basically will be offering the same Val this, the same value proposition that, uh, park Fatma is, uh, is doing and is consolidating as we speak in Mexico.

Julio Martinez: 6:18

Excellent. Excellent. All right. Um, Eduardo, let's talk about, um, trends what's happening in Mexico, uh, that, um, in terms of social matters, economic, uh, disease matters, why is it that companies are going to Mexico to set up a, a shop in, in the country because you, I, I usually hear about Tijuana, but not Mexico city, not that area. So what's happening there. What's what's where are the trends relevant to discussion? Well,

Eduardo Valencia: 6:50

There are many important factors. Most, most of them, uh, very widely known and understood. One is Mexico is a large country in terms of population, uh, more than 125 million people, uh, currently. And, uh, we are not a, not a rich country, but we are struggling to be a part of a, of, of a community of, uh, countries that can take most of, uh, or can reduce the poverty level of most of the, the population. Uh, an important thing is that we, we are neighbor to the us, and we are part of this great market with the us and Canada, which is a, an economic block that, uh, it not the most important, but it's, uh, among the most important, uh, blocks in, in the world. And that is very important. The proximity and the, um, and the Mexico has, of course, uh, this, um, this Alliance, this, um, trade association with the us and Canada, uh, it's been for more than what signed in 1994, NAFTA. Yeah. NAFTA, and now it's not NAFTA it's, uh, yeah, it's something

Julio Martinez: 8:33

Else.

Eduardo Valencia: 8:34

It has been upgraded being,

Julio Martinez: 8:36

Aim it and upgraded yeah. Modernized the, uh, treaty. Yeah.

Eduardo Valencia: 8:40

Right. And, uh, it's important, very important because we are now entering, or we are now in this phase where, uh, China, Asia, but mostly China is, uh, striving to become leaders in a lot of, uh, areas. And of course you have these two Titans know the us and China, um, trying to the us to maintain its supremacy and China is trying to, to chip away some of those, uh,

Julio Martinez: 9:19

They wanna take over the world probably by the end of the yeah.

Eduardo Valencia: 9:22

Uh, and something very interesting. And we have seen it, uh, in a very sharp way, um, during the pandemic is logistics now, and logistics have, uh, this supply chain has been some way somehow disrupted because of, uh, of the pandemic consequences. And, uh, it has been stressed. And we were talking recently about nearing, which is a new term, uh, maybe 20 or 25 years ago, the term offing was, uh, begun to, to be used. And now we're, we're talking about nears, reassuring, which basically means bringing manufacturing, uh, to, to the Americas, uh, in order to, to kind of, uh, defend ourselves our economies.

Julio Martinez: 10:23

Yes. Not rely on, on, on China for manufacturing. Yeah. And, and to have friendly countries be our manufacturing partners. I mean, the United from the United States perspective.

Eduardo Valencia: 10:36

Right. And well, those are trends, very important trends. Population is a trend. Uh, the aging of the population is a very important trend in terms of healthcare because, uh, Mexico is not a, uh, doesn't have still a, a problem as acute as Japan in terms of population, the age, the, the average age of the population. But we're not a very young population anymore. We're going there. And because of a lot of things like genetics, uh, and, um, uh, habits, eating habits, and what have you, we have very important chronic diseases, uh, in our population, diabetes, um, cardiovascular, Mexico

Julio Martinez: 11:41

Is one of the top countries in the world, probably the number one in diabetes. Right.

Eduardo Valencia: 11:46

Yeah. We have that, uh, honor to be the number one in, uh, in overweight, uh, people. And of course with that comes metabolic diseases.

Julio Martinez: 11:59

Wows are too good. I mean, you, how can you eating attack on the<laugh> and all that? I mean, it's fascinating.

Eduardo Valencia: 12:12

Yeah, you're right. Yeah. So we have those, uh, realities, uh, and of course it doesn't mean that we, we're not we're. We are out of the forest in terms of, um, infectious diseases, communicable diseases. We have those, but then we have cancer, diabetes, cardiovascular, and all those kind of new diseases of, uh, of this new society. Um,

Julio Martinez: 12:46

The middle class, the growing Americanized middle class<laugh>

Eduardo Valencia: 12:49

Yes, yes. Yes. Because we, we being so close to the us, we have been importing and, uh,

Julio Martinez: 12:57

Yeah. Lifestyles,

Eduardo Valencia: 12:59

Yeah. Lifestyles. And sometimes, uh, it has not been the best, uh, decision because we have different, um, genomics in, in, in, uh, in some ways. So those are tr in trends that, uh, are important in, uh, the health in life sciences for Mexico and healthcare specifically for, for Mexico. Uh, we have a, um, a reg regulatory agency, which has worked pretty hard in the last, uh, two decades to become rec to be recognized as, uh, a good player.

Julio Martinez: 13:47

Yeah. Level four. Yeah.

Eduardo Valencia: 13:49

Right. And, uh, that is good. We, because of that, uh, we are facility, uh, the landscape of pharma facilities in our country has somehow changed. And also the, uh, what ha the generics drugs, uh, have made a huge impact in, in our country. And, um, we are now taking, we are now, uh, experiencing the first part, the first phase of biotech going into, uh, medical into therapies and, uh, medical devices. And what have you in, in Mexico, uh, we're, we're still, uh, lagging in regards to, to rich countries. But what, what is a reality is that Mexico has very high levels of talent of, we have a lot of, uh, talented people in those areas. Um, and what we need to do is create what we are lacking is the Infor, the infrastructure for these new, um, drugs, these new processes, fermentation and all those, uh, processes, because now it's not the APIs that, uh, that matter it's the, the, let's say natural ingredients are PR produced or manufactured by the, by bacteria.

Julio Martinez: 15:41

Hmm. Interesting. So most of your clients, uh, or your tenants, if I'm using the right word, are companies foreign companies that are looking to manufacture in Mexico for the local market, or looking to manufacture in Mexico to export to United States or other markets or a communication on both. Can you describe that?

Eduardo Valencia: 16:06

Yes. Sure. It's very interesting. Parma offers these, uh, compliant, totally compliant facilities for, uh, drug manufacturing in Mexico, our regulatory agency, uh, which is Ric, uh, makes you, if you want to register your product and, uh, under your name in order to commercial, to commercialize commercialize in Mexico, you basically need either to have a factory in one of those countries that Mexico recognizes as equals, or you need to have a licensed and certified facility in Mexico. And then, and that facility all has to have what we call a sanitary license and also has to have a, uh, certification of GMPs. So, uh, we have had, uh, we, we are very, uh, strongly focused on providing, uh, facilities, very com compact facilities, totally compliant with, uh, this sanitary license and with GMPs two foreign companies that want to enter for the first time the Mexican market, but that maybe do not want to go into the manufacturing process right away and would rather, uh, as a first phase import their drugs, their, their products, we

Julio Martinez: 18:07

Package something locally.

Eduardo Valencia: 18:10

Hmm. Right. And then what they, they do want, they're very specific about being able to register their products under their name. And that's where we, we, we come in because as we, we said in the beginning in Mexico, there is no, uh, real estate market for pharma or medical devices, facilities. You cannot go out and, you know, go visit a number of facilities that are for sale, or that are, uh, open for rent. So the alternative would be to go and, uh, build, uh, do, do they hold Ench by yourself, which is very, very complex. Can take you from three to five years sometimes, uh, is very expensive. Uh, very, it, it is very complex in terms of, uh, being able to hire the right companies, the right consultants. And, uh, maybe in four years you succeed, or maybe you don't succeed because you, uh, you had a number of, um, compliance or whatever, uh, problems, and you have invested a lot of money taking, uh, great, great risks. And you have, you also, uh, have the opportunity cost of not being, to not being able to go into the, into the market, uh, as, as soon as possible as, as fast as possible. So what we do is, um, reduce dramatically the, uh, lead time of those solutions and add certainty trust to, uh, to the, to the services and be besides the facilities itself, uh, we offer a number of expert and strategic services that always, uh, accompany the, um, manufacturing or the far pharmaceutical businesses, for example, regulatory, consultancies, uh, legal marketing, um, commercializing, uh, uh, uh, services. And, uh, we, we do that, uh, as, um, acting a lot as a, as a, when you go to a five or six or seven star hotel, and you go to the concierge because you know that he will be able, he or she will be able to answer all your questions, a concept that we, that we like a lot, we are a one stop shop. And, uh, like I was saying, we, we basically strive to be, to offer the whole NCH

Julio Martinez: 21:27

NCH.<laugh> wow. ARD though, this is really fascinating. I never heard about a concept, uh, like this. So if I understand this correctly, uh, allow me to summarize. So if a company is, if a foreign company is, if a Chinese company, for example, doesn't have C mark approval, FDA approval, or, you know, reference Contra approval, then they have to set up a local entity, Mexico, or to, uh, and, or set up a facility Mexico so that they can have control over their cover priest, registration. Otherwise they have to rely on third parties like registration holders and things of that nature. Is that correct?

Eduardo Valencia: 22:09

Yeah. Basically either you have your license and you can, you own your registries and they are under your name, or you will have the alternative to go to a third party that has a facility, a li a license facility, and you have to sign what, uh, we call a hosting contract.

Julio Martinez: 22:37

Yes. Hosting contract.

Eduardo Valencia: 22:38

And the problem is that the hosting, the hosting concept is not a nice one for either either party. It's very interesting, but it's, it's, uh, nobody enjoys it.

Julio Martinez: 22:53

<laugh>,

Eduardo Valencia: 22:55

Uh, because it's like, uh, uncomfortable marriage that, uh, they, none, none of them would've chosen to go into that relationship if, if there, if there were a good alternative. So, um, for example, we, we started a, a LinkedIn campaign, um, some three weeks ago. And, uh, surprisingly our first leads are coming from India,

Julio Martinez: 23:32

India. Okay. Right. Generics

Eduardo Valencia: 23:36

Some, I guess yeah. Somebody would say, uh, that's. That, that makes no sense, but it does. Uh, if you remember what we talked about earlier on about, uh, the disruption of the, um, supply chain, they might have the, um, greatest volume capacity and the best prices or costs, but they are so far away that, uh, they're thinking not only of coming and selling their products, they are now thinking about selling shop.

Julio Martinez: 24:19

Wow. This is really, I need to see in development. I didn't know this, but, uh, I'm, I'm glad that, uh, Indian companies are thinking about that because, um, we need that in Latin America, uh, going back to the issue of nears sharing, that's what Latin America is, is looking for. And there's something that we didn't mention where we were talking about trends, uh, Eduardo, which is a few Latin American countries, at least the four most forward looking countries, which in my opinion, and in the opinion of experts and, and, and, and that's why we have the Pacific Alliance, Mexico, Columbia, Peru, and Chile, these four countries are really, really looking at the future and they are looking to diversify their export base. I mean, exporting coffee and, and, and soccer players and, and bananas and avocados is not gonna cut it. It's gonna, it's not gonna cut it in the future future.

Eduardo Valencia: 25:22

It's not to do the trick.

Julio Martinez: 25:23

Exactly. It's not gonna do the trick. You have to export knowledge, you have to export sophisticated services and products. And, and, uh, this is where nears reassuring comes in, uh, because you, if you bring pharmaceutical medical device companies, biotechnology companies to a country like Mexico, then, uh, it is just the beginning of a, of an ecosystem that will eventually create more jobs, high paying jobs, bring more knowledge to the area, diversify the economy, et cetera, et cetera. Look at what Mexico did with, uh, Tijuana look at what Costa Rica such a small country did. And Costa Rica is now one of the stars in Latin America in terms of, uh, exporting, uh, medical devices, uh, in, in, in, they have such an immense number of sophisticated, uh, med Buse. I mean, a lot of these companies, manufacturing, Mexico and Costa Rica.

Eduardo Valencia: 26:23

Yeah. Right. And also looking to position park pharma as a, as a main, not, not main as a very important player in the clinical trials, uh, uh, part or faces, uh, of the, uh, of the development of new drugs. Uh, we have been present in these, uh, clinical trials called multicenter clinical trials for the, uh, COVID vaccine, some of the COVID vaccines. And that happens to, to be because the Mexican population, which is a very diverse in terms of genomics, ethnic groups, uh, are very, are, make it very interesting to do clinical trials here in relation to the, his, to the Hispanic population in the us. So that is only going to grow. And what we need is to have what we would, uh, basically be doing as Parma is providing the certified facilities that would do, would support that part of the clinical trials, uh, processes. So that's, that's very interesting. Um, as I was, uh, saying the, um, biotech, um, companies, either the, the ones that are, um, being created and being developed in Mexico and also, uh, biotech companies from, from abroad, not maybe not very early star startups, but we are pretty sure because it makes sense that, uh, some of these startups, which are, uh, into the acceleration phase would be very interested in having a foothold in the, in Mexico, in order to not only reach the Mexican market, but be able to reach the Latin American.

Julio Martinez: 28:53

Yes, exactly. Yeah. Ex especially now with the Pacific Alliance and, and more and more conscious when I joined the Pacific Alliance, I just, uh, read, uh, a few months ago that Costa Rica just became a O C D member and is, it will become part of the Pacific Alliance and, and Panama as well, et cetera. So Eduardo, I, I I'm, I'm impressed with what you're doing. I mean, you have taken your real estate business, have sophisticated the concept, the value for position so much that you are a combination of, uh, regulatory referral consulting company with our contract research organization. I mean, you have many avenues, uh, or many ways to help foreign companies to set up a shop in Mexico.

Eduardo Valencia: 29:42

Right. And the center still is a real estate, uh, working on a, on a very specific niche, which is life sciences. And of course we have, uh, many layers, uh, around us, which are not basically basically operated, uh, vertically by us, but, uh, are operated by, uh, many experts that we have been working with for many years.

Julio Martinez: 30:16

Yeah, yeah, yeah. Yeah. Beautiful. Beautiful. And I, I, and also, um, I like to point out that, um, what you're doing is something that many other countries in Latin America are doing specifically Columbia. I was just attending a meeting, uh, a virtual meeting with the, uh, ambassador of Colomb and India, the ministry of, uh, industry and commerce of Columbia, uh, PR Colombia, which is the export promoting agency of the country. And, uh, is very obvious that Colombia is bearing all nears, reassuring, uh, to bring medical device and, and pharmaceutical and biotechnology companies to set up a shop in Columbia. So your example is, is, is something that can be replicated in, in many other countries in Latin America, specifically in Colomb for the benefit of, of all of us, of our economies. And I applauded your, your, your initiative and your, your spirit of an, of an entrepreneur. I mean, talk about with all these ideas.

Eduardo Valencia: 31:18

Yeah. Without any doubt, uh, we, we, um, forecast a very strong, maybe not very rapid, but very strong growth, uh, growth of, uh, this concept, uh, in which now is, is located in Toka, but we're pretty sure will be setting shop in Guadalajara, which is a very important, uh, pharmaceutical city and then maybe Monterey. And of course, uh, Tijuana Tijuana is basically a medical device, uh, pole. Um, but I'm pretty sure that it might also have a lot of potential for, uh, oh, totally. Absolutely manufacturing.

Julio Martinez: 32:11

Absolutely. So the, the last question I have, uh, Eduardo, before we, we end, uh, the episode today is the government, is the government helping you with what you're doing, because in a sense, you're, you're bringing foreign investment to, to Mexico with your LinkedIn campaigns, with your private initiatives. So is the government somehow supporting your work or not?

Eduardo Valencia: 32:34

Um, well, let, let me be Frank. It, it's not helping us as, as much as we would like, but, uh, we are, we are having conversations with the, um,<inaudible>, which is like the national health institutes of the us GoIT supports, uh, the science and the technological development in Mexico, federally. We are talking to them, we are talking to the pharmaceutical chamber national chamber of, uh, of, uh, companies. And, um, we're, we're basically, uh, trying to convince them that it's very important for Mexico to, to create some public policies that we will really strengthen the eco, the business ecosystem around life sciences. Uh, we are not the, the, the solution for everything. We are an important player, but we can help assemble, uh, some of these, uh, some of these ecosystem players. So we, we basically hope to be able to, to convince them, and also to convince Karis, not to give us a Carlan, uh, but to, to, to support the, uh, effort that we're doing in creating certified facilities that will help bring many more good players into our country and be able to create more competition to lower prices, make them more accessible and create a, a much more diverse, um, menu of, uh, drugs,<affirmative> drugs

Julio Martinez: 34:49

Options for patients. Yeah, yeah, yeah. At the end, that's, that's really the ultimate goal. I mean, it benefits patients,

Eduardo Valencia: 34:56

Right?

Julio Martinez: 34:57

Yeah. So, so one quick question, before we end here, and, and it is in regards to the government of, uh, ERs over AOR, I heard, or<inaudible> I heard, or I read somewhere that, uh, he eliminated the expert and investment promoting agency of Mexico right after he took up, uh, power. Is that right?

Eduardo Valencia: 35:20

Yes. Uh, it was called pro Mexico,

Julio Martinez: 35:23

Yes. From Mexico. Yes. In

Eduardo Valencia: 35:24

Fact, but Mexico was, uh, very important in bringing Parma our first, uh, client

Julio Martinez: 35:37

Wow.

Eduardo Valencia: 35:37

From, from Italy. I have to recognize that yes. They, they, um, basically raised from me from Mexico. Um, yeah, we're not very happy about that, but, uh, we do understand that maybe it had been, uh, it was an agency that had become, uh, very fat, very,<laugh> kinda very, very expensive. Those things sometimes happen, but, uh, yeah, we, we are happy to be so close to Canada and the us so that, uh, we don't have, uh, nightmares, uh, in, in Mexico, but yes, we are in the middle of this, uh, of this government it's it's in it's third year and we still have three more years to go three more

Julio Martinez: 36:39

Years with six years. Wow.

Eduardo Valencia: 36:43

I, we like to do is being our trenches and, uh, work as hard as possible. And, uh, the, the government is a very important, but we, I, I have also learned by looking at countries like the us Canada and others, that government is not everything governments come and go. Most importantly, it's the people it's. And we have a very good, uh, people in terms of, uh, companies, entrepreneurs, uh, talent scientists. So we have to work with that and we, we are doing that and we are making progress.

Julio Martinez: 37:32

All right. So Eduardo, before we close the episode today, what would be your final words of wisdom? I mean, if you had something to say, if you have one minute to, uh, to give advice to the, uh, CEO of a medical device, pharmaceutical biotechnology company from the us or Europe, uh, that is just looking at Latin America, specifically Mexico, to, to enter the market, what would you say to him or her?

Eduardo Valencia: 38:01

Well, uh, Mexico is a great country. It is a great market. It is a, it is the best platform for Latin, Latin America. Uh, and if you are, if you are interested in doing business in medical devices or in pharmaceuticals in LA Latin America, Mexico is your choice. And PA Fatma is the right place. It's a one, one stop shop to, to be able to do a soft landing in a complex landscape, uh, both regulatory, uh, market market wise and legal wise. So, uh, we we're here, uh, more than happy. We'll be more than happy to, to talk and to understand the special needs requirements, uh, fears and everything from every single company in order to be able to, to help them and accompany them and, uh, try to make them as successful as possible.

Julio Martinez: 39:20

Excellent, excellent. ARD. All right. So Eduardo, thank you so much for being the show today. Um, how can people get in contact with you? Is there a website, an email or something?

Eduardo Valencia: 39:32

Yes, we, we have, uh, a LinkedIn, uh, site, uh, it's par pharma pharma with a pH, uh, we have a, we have our page, which is, uh, Parque pharma.com and, uh, you can reach us there and, uh, let us know, let us know what your, what your plans are, and we will get in touch immediately and, uh, talk it over and find the best, the right and best solution for, uh, for you, if we can.

Julio Martinez: 40:14

<laugh> our, I'm sure. You'll, I'm sure you will be able to<laugh>. All right. ARD though. Thank you so much for being the show today. I appreciate, uh, your time and, uh, I really enjoy your, your, your wisdom and your experience. And, uh, I enjoy our conversation today. I'm sure listeners did as well.

Eduardo Valencia: 40:33

Thank you very much for the invitation, and we'll be looking forward to having another one in the, in the future.

Julio Martinez: 40:41

Excellent. Bye

Eduardo Valencia: 40:43

Byebye. Thank you.