3Sixty Global Solutions Group: Khandani Msibi, Group CEO

3SIXTY GLOBAL SOLUTIONS GROUP evolved from funeral services, and is now diversifying into biotechnology (pharmaceuticals). We spoke to Khandani Msibi, Executive chairman of 3Sixty Global Solutions Group and Group CEO of NUMSA Investment Company to learn more.

1. What was the rationale for diversification into the fields of biotechnology and pharmaceuticals?

When I joined 3Sixty Global Solutions Group (“The Group”), its major business was provision of burial and cremation services through Doves Group as well as Independent Crematoriums South Africa (“ICSA”). We saw this business model as unscalable and extremely hard to market. Thus, we shifted our focus to the “life-enhancement” side of things instead of the “end of life” side of things. The immediate diversification was to get into life insurance with the acquisition of Union Life in 2009 and we later rebranded it 3Sixty Life.

Our strategic view about our clients was that it is more desirable to help them live longer, healthier lives and pay us a premium for longer, as opposed to relying on a business model which entails a once off transaction, burial or cremation services. We classified death as an unfortunate event for which our clients must be covered to ensure a dignified send off in its eventuality.

We expanded our business strategy to encompass business models which can help prolong life and active economic participation. The medical aid industry became very attractive as a means of fulfilling that strategy. As a result, a 10year strategy was developed from 2010 to enter the healthcare industry. The Group started at the bottom by starting 2 health care advisory companies, NUMSA Financial Services and 3Sixty Client Solutions and progressed to the acquisition of Sechaba Medical Solutions which we since rebranded to 3Sixty Health. 3Sixty Health administers both Sizwe-Hosmed Medical Scheme and the South African Breweries Medical Aid Society.

Further analysis indicated that medical aid costs are driven by hospitalisation, pharmaceutical products, and specialist services. We attempted to enter the hospital industry with little success, our view at that time was that the pharmaceutical entry is difficult and that South African pharmaceutical companies were primarily distributors of products from foreign companies. As such our group did not want to be in that type of business arrangement. We regarded specialists as the “gods” of the industry that kept power to themselves and could not be disrupted.

It was not until I met Martin Magwaza, that the possibility of playing in the biotech space, through innovation as an equal amongst international innovation-based companies became apparent. We have over the past 5 years invested significantly in biotech to develop, reformat, and reformulate existing compounds which have set us apart from existing South African pharmaceutical companies. We created 4 start-up companies which focus on well specified and well-chosen areas of biotechnology, namely:

3Sixty Biopharmaceuticals:

In this subsidiary we invested in Covid therapeutics, Covid vaccines, and antimalarials. The Group successfully completed animal tests for a Virus-Like Particles vaccine grown off tobacco leaves, with the majority of our work having been internationally published in peer reviewed journals. We are about to conduct animal tests for our Covid therapeutics and malaria drugs. 3Sixty Biopharmaceuticals is currently expanding its anti-infectives portfolio to tackle multi-drug resistant infections through a new strategic partnership. Our company is also pursuing compounds that show potential for the treatment of Alzheimer’s.

Sixty Biomedicine:

Under 3Sixty Biomedicine, we have botanical extract-based women’s health products, the first migraine prophylaxis capsule and proprietary strains of rationally designed probiotics for gastric health and metabolic disorders.

3Sixty Nuclear Medicine:

We are preparing to launch radioisotopes for cancer treatment, rheumatoid arthritis, and haemophilic synovitis.

Cape Sativa:

This is our cannabinoid business focused on using nanotechnology to produce finished dose formulations. This subsidiary is not in the business of growing cannabis nor doing primary processing. Our focus is to develop cannabinoid-based therapeutics for cancer, communicable diseases, metabolic and mental health disorders. The business is about to start animal trials for our cancer applications. Additionally, we have developed water-soluble cannabinoids for use in beverage and nutritional products.

2. What opportunities are there for South Africa in terms of pushing R&D, development and production of biotech and pharmaceutical products?

South Africa lost a culture of investment in innovations as the State has been discouraged from being entrepreneurial with the gap left by the State not filled. You would remember that the Sasol coal to fuel, Pebble Bed Modular Reactor, Rooivalk and many other technologies we led the world with were part of the State’s investment in innovations.

Despite having vast technological innovation, South Africa fails to capitalise on these technologies, which are available from universities and state research agencies. Despite South Africa’s world-class research capability, it lacks entrepreneurship collaboration, so our scientists do research out of scientific curiosity rather than progressing technologies from conception to commercialisation.

Additionally, unlike Nasdaq in the United States of America (USA) the Johannesburg Stock Exchange (JSE) does not have a culture of supporting new ventures, the requirements for listing are such that you need to have a track record of at least 3 years of revenue and profitability. Our retirement fund legislation is such that investment in unlisted assets is uncommon and venture capital funding is also limited.

Unless we unleash funding to entrepreneurs, value in the JSE will always be driven by the problem of “too much money” chasing “too few assets” and the JSE appreciation will remain at variance with the performance of the economy for its citizens, red hot stocks in the mist of increasing unemployment.

Investment in innovation is the only reason why the USA dominates the world economy, the rest of us are their clients and at times we copy what they have produced. Investment in innovation for South Africa will make us an industrial giant we should be, it’s the only way we can eliminate unemployment and poverty and solve some of our most complex problems.

As an African organisation with global aspirations the diseases of the developing world like tuberculosis (TB) and malaria will receive serious attention from us. We need to ask ourselves how can TB remain as the number one killer in South Africa in this day and age, how can malaria be the number one killer in Africa and both without Africans and South Africans making significant investment in research? That being the case, investment in such areas will be our contribution to society amongst other things.

3. Does SA have the capacity and resources to compete in the biotech sphere on a global scale? Please elaborate. Yes, South Africa has enormous research capability and capacity in State agencies and universities. These capabilities exist but they have remained unrecognised because we lost the culture of investing in innovations at the level of the State. Our economy is too skewed towards financial services and mining. Banks employ engineers so that they can assess mining proposals, but they are in the dark about Biotech. A country will only become successful in areas it focuses on and heavily invests in from a research and investment perspective.

Our competitive advantages include being the lowest cost research destination, not being new to manufacturing, having a skilled workforce that is unemployed and having the South African Health Products Regulatory Authority (SAHPRA), a globally recognised regulatory agency. Although limited, South Africa has a few companies that specialise in clinical studies and the University of Cape Town’s Institute of Infectious Disease and Molecular Medicine has a Biosafety level three (High containment) accredited facility handling highly infectious disease agents required for basic research and diagnosis. Our country has the skills to become a biotechnology powerhouse, a position we occupied before losing it to India. As an organisation we picked this opportunity and have spent the past 5 years gobbling up technologies, registering patents, developing, and testing products. We have a pipeline of block busters which will delight our stakeholders once unveiled and launched.

4. What potential opportunities linked to the energy and telecommunications sectors is The Group investigating?

We regard energy and telecommunications as the next frontier for us after biotech. The organisation has looked at Small modular reactors (SMRs) and the Open Base Transceiver Station (Open BTS). Our work on SMRs has led to contacts with companies from the USA, South Korea, and China. Our telecommunications technology is a local innovation based on Open BTS, a USA open-source platform that enables calls into the Global System for Mobiles (GSM) at minimal cost. We placed the former on abeyance and some work continues on the latter, all due to the disruption of Covid and the 3Sixty Life curatorship.

5. What are some of the Group’s offerings to mitigate challenges?

Our investment is designed to address the challenges of rising health care costs caused by the burden of disease. For instance, our investments in weight loss technologies (3 weight loss products will be available) will have a positive impact on diabetes and hypertension. In conjunction with this investment, we are acquiring a company that specialises in treating diabetes and hypertension. They have a vision to expand services to include renal dialysis, pathology, and a whole lot of areas in which we can bring costs down whilst making a decent profit.

6. Is the vision of being “a listed Pan African Group with significant global market presence by 2025”on track?

This objective remains on track, albeit in different shapes. We have broken the Group into 2 groups now, Doves Group Holdings (DGH) which offers funeral services and insurance, and 3Sixty Global Solutions Group (3Sixty GSG) which offers Healthcare and Biotechnology solutions. The paths taken will be different, but the objective will be met.

7. What are the opportunities for the Group, despite the challenges?

Our investment in biotech remains the single biggest opportunity, we remain one of the few in South Africa who have invested so heavily in biotech research and development, especially considering our size. We remain in an environment where we are exposed to an abundance of technology so much so that we are like kids in the candy shop and have developed the discipline to choose high impact technologies.

8. How is the 3Sixty Global Solutions Group unique in its offerings?

Partnership symbiosis is one of our strengths, as we are able to engage with local and international partners effectively, because we have a unique biotechnological innovative offering to put on the table. Partnerships are transformative in that, through complementing one another we are able to advance each other’s objectives much quicker and cost effectively. Our growth will be driven through entry into global markets through partnerships as well as offering inward and outward innovative products. We will export South African Intellectual Property (IP) and integrate with the best global IP to advance mutual benefits with numerous partners.