Rwanda makes third bid in big pharma with pension funds

This week, Akagera Medicines Africa, which is majority-owned by RSSB, closed its first-ever commercial financing deal with the European Investment Bank (EIB), signalling its readiness to shift from the trial stage to actually commercialising its products for profit.

The European multilateral lender sourced the €2 million ($2.17 million) from its Global Gateway Initiative, which focuses on impact investments through equity and debt transactions in emerging markets.

Although coming at concessional terms, this financing agreement differs from the other funding deals Akagera has closed so far, which have been in forms of partnerships and grants, including from the Bill and Melinda Gates Foundation, the Coalition for Epidemic Preparedness Innovations, and the National Institute of Health in the United States.

The new funding is meant to “accelerate research and development as well as manufacturing of new vaccines to treat infectious diseases including HIV, Lassa Fever, and Ebola,” EIB said in a dispatch, adding that the financing will also facilitate development of technical skills for the firm.

While this is not so distant from what Akagera has been doing since its founding in 2022, with the new financing, the institution has now confirmed its intentions to go fully commercial and claim a part of the global pharmaceutical industry market.

“With the significant support of the European Investment Bank, we are now a clinical company and moving faster to build human capacity and specialized infrastructure in Africa to support vaccine development,” said Akigera’s CEO Michael Fairbanks.

RSSB’s chief investment officer Pillippe Watrin told The EastAfrican that the new financing will enable Akagera to “reach commercialisation by 2027-2028,” mostly selling mRNA vaccines and a variety of drugs already under development.

Read: Rwanda breaks ground on first mRNA vaccine plant in Africa

RSSB’s first and second attempts at investing in the pharmaceutical industry did not end very well. The latest one, in which it invested $40 million between 2017 and 2018 in US-based Leaf Pharmaceuticals, ended up in a court case with RSSB claiming it was defrauded by Leaf by false representation as to ownership of patents to its products. The case is yet to be determined by the Court of Chancery of Delaware.

Before that, RSSB had invested about $16 million in La Rama Pharmaceuticals, a start-up, but did not receive the anticipated returns, subjecting it to public criticism on its investment choices.

However, RSSB, which also provides public health insurance in the country, is confident that its escapades in the industry with Akagera will go well, unlike the previous times, and end up in profitability.

“RSSB has taken several steps to ensure that its investment in Akagera Medicines is well positioned to deliver meaningful returns,” Watrin told The EastAfrican in an e-mail response, but did not divulge into details of the steps taken.

“The partnership with EIB also signals strong external validation, as this deal involves co-investment from reputable institutions with a deep understanding of the pharmaceutical sector.”

Unlike RSSB, its peers in the region have invested at least 80 to 90 percent of funds under their management in government securities, corporate bonds, and equities, but none has an appetite for a particular industry, as the Rwandan body.

Mr Watrin said that while about 60 percent of RSSB’s assets are invested in fixed-income securities, its equity investments “combine financial and socio-economic returns for Rwandans and align with the country's development goals.”

“Specifically, this investment (in Akagera) aligns with Rwanda’s vision of becoming a biotech hub in Africa and transitioning to a knowledge-based economy,” Watrin told The EastAfrican.