Avalon’s Generic Mounjaro Is Not Yet Saudi-Made

Mounjaro, Eli Lilly’s tirzepatide-based drug.

Avalon Pharma has put a large number on its licence to sell a generic version of tirzepatide, the drug Eli Lilly markets as Mounjaro and Zepbound.

It has not put a date on it. The details point to a long wait, and a longer one for tirzepatide made in Saudi Arabia.

The licence, agreed with India's OneSource Specialty Pharma, is expected to generate cumulative revenue of at least SAR800 million in the first five years after launch, across Saudi Arabia and other markets in the Middle East and North Africa.

Spread evenly, that is SAR160 million a year, about 35% of Avalon's 2025 revenue of SAR460.5 million. That is an illustration of scale, not a forecast. The announcement does not say how much would come from Saudi Arabia.

The agreement sets a condition rather than a date. Each market can launch only after the relevant patents expire, both there and in the country of manufacture.

Nothing Avalon has said since fills that gap. Its third-quarter results cover the period to 30 September, before the deal was signed.

In comments to Argaam on 4 November, Avalon attributed its outlook to private-sector sales, exports, government tenders and new production capacity. The licence was not among them, and no timetable was given for it.

The patent calendar therefore matters. The Geneva-based Medicines Patent Pool expects the main tirzepatide patent to expire in 2036 in the low- and middle-income countries where it has been granted, and Lilly’s later patents on the injection’s recipe in 2039. Neither date has been confirmed for Saudi Arabia.

Eli Lilly's later patents on the injection's recipe have been filed and granted widely in the same countries and are expected to expire in 2039. These figures do not cover Saudi Arabia, a high-income country, where the patent position still needs confirming.

Where the drug is made matters as much as who sells it, and the announcement does not say where that will be.

If it is made in India, where a recipe patent was granted in March 2025, Indian patents could set the timetable, and sales might not begin until after 2036 unless OneSource's version avoids the recipe patents.

Avalon will hold the marketing authorisation for a multi-dose pen in six strengths, from 2.5mg to 15mg, and can ask OneSource to transfer the manufacturing technology.

It can do so only after commercial launch, however, and the announcement sets no commitment or timetable.

A transfer therefore cannot be used to move production elsewhere and launch sooner. Where it is made need not slow approval: Saudi Arabia's drug regulator fast-tracks the first generic version of a medicine, wherever it is produced.

Avalon does not yet make injectable medicines. Its plants produce tablets, capsules, liquids, creams and other topical products.

Injections will come with Avalon 4, a new plant for cancer, injectable and eye medicines due for completion at the end of 2027, long before any tirzepatide launch. The plant itself is therefore unlikely to be the constraint.

The open question is what a transfer would cover: filling and assembling the pens in Saudi Arabia, or making tirzepatide itself, the more complex step. The difference matters: the regulator's localisation route applies only if every stage of production takes place in the Kingdom.

The Saudi Food and Drug Authority's new guidance, issued on 14 October 2026 and taking effect on 1 January 2027, accepts partial local production only for biological products.

Tirzepatide is regulated as a conventional drug, so filling pens alone would not qualify.

Separately, products under the authority's Pharmaceutical Industry Transfer and Localization Initiative must meet additional local-manufacturing conditions. At least at first, the deal secures the right to sell tirzepatide, not to make it in Saudi Arabia.

Beyond the Kingdom, the licence would extend a regional business that is still small. Exports made up 13% of Avalon's 2025 revenue, with recent growth led by the UAE, Iraq, Kuwait and Oman.

Markets need not open at the same time, and the announcement does not say whether the five-year revenue window, or the ten-year contract term, starts with the first launch anywhere or separately in each country. That matters if markets open years apart.

Egypt’s route is already taken

Egypt offers no obvious shortcut. Avalon is building a business there through contract manufacturing and distribution agreements, with revenue targeted from 2027, but has not said that tirzepatide is part of that plan.

The announcement does not name the markets the licence covers, so it is not clear that Egypt is one of them. Even if it is, the right to take over manufacturing applies only after launch. Lilly is also already established there.

Its local partner, EVA Pharma, holds the marketing authorisation for Mounjaro, made the original product available earlier in 2025 and launched the KwikPen in July that year.

By the time the licence pays, it may also weigh less in Avalon’s results than today’s figures suggest: third-quarter revenue rose 15.2% to SAR124.4 million. On what Avalon has disclosed, Saudi value has no start date yet. It must wait for patents to expire in Saudi Arabia and in the country where the drug is made, and value made in the Kingdom would come later still.

Avalon can seek to take over manufacturing only after launch. Even then, the product would count as locally made only if every production step moved to the Kingdom, including making the active ingredient. Until a launch date appears, the licence is best valued as an option on Avalon's future rather than a line in revenue forecasts.

Four developments will show whether that judgement holds. The first is whether Avalon says when the five-year revenue period begins: with the first launch anywhere, or separately in each country.

The second is confirmation, from the Saudi patent registers, of when Lilly's patents expire in the Kingdom.

The third is an application by Avalon to the Saudi Food and Drug Authority. The rules allow one up to two years before the patent expires, so a filing would signal that launch is close.

The last comes only after launch: whether Avalon asks to take over manufacturing, and whether it would make the drug itself or only fill and assemble the pens.

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