Bio booms as Covid lingers and CMO vaccine orders surge

A truck carrying 2.4 million doses of Moderna vaccines bottled and packaged by Samsung Biologics leaves the Korean company’s plant in Songdo, Incheon, for domestic use on Oct. 28. [NEWS1]

Korean biopharmaceutical companies are enjoying a strong third quarter on the lingering Covid-19 pandemic and sales of vaccines they produce under contract manufacturing organization (CMO) deals.

SK Bioscience, a CMO for Novavax and AstraZeneca Covid-19 vaccines, posted a record net profit of 76.4 billion won ($64.6 million) in the third quarter, up 137.3 percent on year. Its revenue surged 123.8 percent to 220.8 billion won, while operating profit soared 175.3 percent to 100.4 billion won, also a record.

“Performances improved on strong global sales of the AstraZeneca and Novavax vaccines that were produced by SK Bioscience,” the company said in a regulatory filing.

The company is likely to stay in the black in the fourth quarter as well as the Novavax vaccine won an emergency use approval from Indonesian health authorities on Nov. 2. Novavax plans to lodge applications with the European Union and Canada soon.

“SK Bioscience is expected to achieve an even larger profit jump in the fourth quarter,” said Lee Dong-gun, a senior researcher at Shinhan Investment. “The company is likely to reveal the results of its Phase 2 clinical trials of the GBP510 Covid-19 vaccine, and if the results are good, many countries will contact the company to make orders.”

GBP510 is the first domestic Covid-19 vaccine candidate to get the nod to start Phase 3 clinical trials — the last round required for a vaccine. The Phase 3 trials take place in multiple countries including Korea and Southeast Asian and European countries. The company aims to release the interim results of the Phase 3 clinical trials by the first quarter of 2022 and, if the results are good, market the vaccine in the first half.

In late October, Samsung Biologics reported net profit of 131.8 billion won, up 135 percent, easily beating the market expectation of 84.7 billion won compiled by FnGuide. Its third-quarter revenue was an all-time high 450.7 billion won, a 64.2 percent year-on-year increase, while operating profit soared 196 percent to 167.4 billion won, also a record.

Samsung Biologics said the “increase in the number of orders and the high operation rate of our third plant in Incheon were the largest contributors.” Last week, the company started distributing Moderna vaccines bottled and packaged by Samsung Biologics. The two companies signed the fill-and-finish deal in May.

Smaller companies including Covid-19 test kit makers also experienced sharp increases in sales.

Daewoong Pharmaceutical generated 14.5 billion won in net profit in the third quarter, up 303.3 percent on year. Its revenue rose 6.5 percent to 265.1 billion won, while operating profit surged 240.5 percent to 24 billion won.

GC Pharma reported 465.7 billion won in revenue in the third quarter, up 11 percent on year and a record high. Its operating profit rose 41 percent on year to 71.5 billion won.

Test kit maker SD Biosensor has not released its third quarter performance yet, but market watchers say it probably achieved double-digit increases in revenue and operating profit.

“Demand for SD Biosensor’s Standard Q test kit, which is currently high in Asian countries, is likely to expand to African countries, where vaccination rates remain low,” Lee said. “If Covid-19 oral treatments release in the market in the future, test kits will receive global attention once again."

According to Lee, SD Biosensor’s third quarter revenue is expected to increase 13 percent to 616.3 billion won and operating profit up 39 percent to 282 billion won.

BY SARAH CHEA [chea.sarah@joongang.co.kr]