Press Release 2007

INSIDER takes you behind closed doors to meet with a top executive. Get to know the industry’s power players on a personal level, and discover their long term strategies and vision for the industry’s future. INSIDER launches this new feature by connecting with Muhammed Majeed, Ph.D., founder and CEO of Sabinsa Corp. Majeed worked previously in research and development (R&D) with major pharma companies in the United States including Pfizer and Carter Wallace before launching Sabinsa in 1988.

INSIDER: Tell us a bit about Sabinsa’s operations and your role in the company.
Majeed: Sabinsa Corp. was founded in 1988 in New Jersey. Sabinsa’s mission is to provide alternative and complementary natural products for human nutrition and well-being. Sabinsa is a company committed and dedicated to the principles of tradition, innovation and research. Founded on the modern application of standardized phytonutrient ingredients, Sabinsa has also established itself as a manufacturer and supplier of high-quality find chemicals and organic intermediates. Sabinsa has grown tremendously through the years. Currently, the manufacturing arm of the company, Sami Labs Ltd., in Bangalore, India, has more than 800 employees, including 100 scientists working in R&D. Of those, we have more than 25 Ph.D.s We also have approximately 100 employees throughout the United States, Australia, Europe, China, Japan, Malaysia, Dubai and South Africa attending to the marketing functions and distribution. Personally, I have overall responsibility for the growth of the company including strategizing, new product identification and staff development. We’re quite fortunate, as the average tenure of our management employees, especially our scientists, is more than a decade.

INSIDER: When Sabinsa was founded, it had a primary focus on pharmaceuticals, but switched to the specialty market. What drove that decision, and how have you maintained differentiation in an increasingly crowded market?
Majeed:The original idea was to market off patent generics in the United Sates to the drug companies. But, because of the “issues” related to out-of-turn approvals at the U.S. FDA in 1988, it was decided to shift to herbals and Ayurvedic products from India. As more competitors and entered the market, we have stayed strong by remaining a science-based company offering evidence based products. Our quality is consistent batch after batch, and we provide value-added solutions of our customers. Sabinsa has carved a niche for itself by its extensive research support for its customers and products, and the scientific credentials of its key technical staff.

INSIDER: Give us some insight into Sabinsa’s operations.
Majeed:Sabinsa manufactures synthetic intermediates used in the pharmaceutical herb powders. We have recently introduced a cosmeceutical line which includes standardized natural extracts used by the cosmetic industry. Our manufacturing and R&D is done in India. Technical support in the form of intellectual property development, clinical trials, formulation etc., is based in the United States. Between 8 percent and 10 percent of the budget of the total turnover goes to R&D; that number has been consistent for the last five to six years. We tend to believe 70 percent to 75 percent of the turnover every fifty year should come from new products. Hence, margin can be maintained. Sabinsa’s efforts have earned the company much deserved recognition that accompanies its growing sales. We have received 32 U.S. and international patents for our products with our efforts in the field of research and development of new products. We firmly believe in “Innovating for the future from our past”. During the past nine years, Sabinsa has brought to the market over 50 standardized botanical extracts. Sabinsa has also privately funded several clinical studies in conjunction with prestigious institutions in support of these products. As far as our customer bas, business in the United States makes about 45 percent of the total business, Japan accounts for about 40 percent, with the other 15 percent spread around the globe.

INSIDER: There is a great deal of scrutiny in the industry about the quality, safety and efficacy of ingredients. What steps do you take to ensure Sabinsa is meeting its customers’ expectations?
Majeed:In an industry posted with a number of regulatory challenges, including FDA’s GMP regulations, our focus has always been on quality and application- oriented research. Several standardized extracts that we manufacture and supply, are currently being used in Investigational New Drug (IND) studies in the United States and elsewhere, with approval from the concerned regulatory authorites. We have always treated our products as it they were drugs and have followed FDA guidelines for GMPs (good manufacturing practices) and U.S. Pharmacopoeia guidelines for quality control. We make products that have GRAS (generally recognized as safe) status; where GRAS status is not available, we have profiled safety of our products including acute, sub acute, long term toxicity, mutagenicity and carcinogenicity parameters. Efficacy is established by clinical trials for each product. We prepare technical dossier on the lines of a drug molecule. In addition, we have discovered two drug molecules from natural sources; one is for glaucoma and the other of psoriasis. The glaucoma drug has already been approved by the Indian FDA; preparations are on to get it approved in the United States. Major clinical trials are underway to evaluate the psoriasis drug.

Insider: What advice would you pass on to newcomers to the natural products industry?
Majeed:It is my firm belief that integration of modern scientific techniques into ayurvedic herbal armamentarium can produce new drug molecules for india and for the world. A revisit into Ayurveda with the help of modern scientific approach from pharmaceutical era can produce very useful and safe products. Like all other industries new comers should be conscious of consumer protection. That means observe quality assurance be a responsible corporate entity and avoid shortcuts. To build a strong and credible image for the industry, both manufacturers of finished products, and suppliers of raw ingredients need to focus on establishing and maintaining quality standards, clinically validating ingredient health claims, and educating consumers on the health benefits of phytonutrients and nutritional materials.

Insider: What are the major challenges facing the industry and where are we headed?
Majeed: Poor quality-oriented marketing companies and lack of enforcement of regulations have really challenged the industry in past years. However in my opinion the industry will expand I the areas of functional food, because people have recognized the connection between disease and diet. Fly-by-night operators will be weeded out. And there will be more natural products, because of their better safety profile, in the health care industry. In the last 15 to 20 years, natural products have gradually changed from being alternate medicine to "complementary medicine" to "integrated medicine". I stand firm in the belief that these ingredients will emerge as safe and effective measures in preventive health maintenance and as adjuncts to therapeutics in the treatment of chronic diseases. Of course, the world is going back to nature.