[INTERVIEW] SK Biopharm made it to the black but doesn't want to play it safe

Industry

Published: 06 Mar. 2022, 17:00 Updated: 06 Mar. 2022, 19:05

[INTERVIEW] SK Biopharm made it to the black but doesn't want to play it safe

SK Biopharmaceuticals Vice President Maeng Cheol-young, who also serves as the chief of the company’s drug research and development division, poses for a photo after an interview with the Korea JoongAng Daily on March 2. [PARK SANG-MOON]

For SK Biopharmaceuticals, last year was one of the best in its 29-year history. The company turned to profit for the first time while revenues hiked 16-fold on year.

This is a notable achievement for a company that develops new drugs. The drug research and development (R&D) process is often referred to as the lottery in the industry as it requires a tremendous amount of money and time investment, though the success rate is extremely low.

It is said that a company needs around 2 trillion won ($1.7 billion) and some 14 years to develop a new drug. The success rate, however, stands at less than 10 percent.

“Since our establishment in 1993, the one fact that has not changed is that we want to be a company that develops new drugs,” said Maeng Cheol-young, vice president of SK Biopharmaceuticals, who also serves as the chief of the company’s drug R&D division. “The success rate is very low, but if we succeed, the profitability is incomparably higher than that of biosimilars and the contract manufacturer organization [CMO] business.”

SK Biopharmaceuticals seems to be bearing fruit, which Maeng attributed mainly to its epilepsy treatment, Cenobamate — its first commercialized drug. According to SK, it is also the first case in which a Korean company developed a drug independently and got approval from the U.S. Food and Drug Administration (FDA).

The company currently has eight compounds in development, two of which are undergoing Phase 3 clinical trials.

The Korea JoongAng Daily on March 2 sat down with Maeng at the company’s headquarters in Pangyo, Gyeonggi, to talk about SK Biopharmaceuticals’ drug developing journey and future goals.

Below is an edited excerpt of the interview.

Q. SK Biopharmaceuticals reported all-time highs in net profit and revenue last year. What was the biggest attributing factor?

A. The largest contribution was the sales of Cenobamate in the U.S. market, which is being sold there under the name Xcopri. The treatment generated 78.2 billion won in sales last year alone in the United States. That's more than six times the total for 2020. The sales are likely to increase further this year as it is selling well despite the Covid-19 situation.

Other contributing factors were that we reached new milestones after Rome-based Angelini Pharma sold Cenobamate in European countries, under the name Ontozry. We also signed technology transfer deals with Canada and China and received upfront payments.

In which countries is Cenobamate expected to gain approvals this year?

In Europe, it is currently being sold in four countries: Germany, Sweden, Denmark and Britain. We are likely to enter France, Italy and Spain this year, and our ultimate goal is to enter a total of 38 European countries.

In the case of Asian countries, it is currently undergoing Phase 3 clinical trials in Korea, China and Japan. For now, our plan is to conclude the last round of trials by the end of 2025 and then immediately apply for approvals.

Biosimilars and CMOs are considered less risky options than new drug development. Why is SK Biopharmaceuticals still hanging on to new drug projects?

Since our establishment in 1993, the one fact that has not changed is that we want to be a company that develops new drugs. Though, we have definitely received many suggestions to expand our business portfolio to biosimilars, CMOs and even the development of genetic products.

The success rate is very low, but if we succeed, the profitability is incomparably higher than that of biosimilars and the CMO business. I can’t give you specific statistics since I cannot know the exact margin rate of CMO companies, but I am certain that the profitability is incomparable.

In the central nervous system field, only 13 companies have succeeded in developing new drugs and marketing them over the past 10 years. SK Biopharmaceuticals is one of them. We have the technology and skills to develop drugs on our own without help from foreign companies. We believe in our capability and potential, and this is the reason why we are and always will be focusing on new drug development.

SK Biopharmaceuticals has seven products in the works other than Cenobamate. As head of the drug R&D division, which do you think has the most potential?

Definitely Carisbamate, a candidate to treat symptoms of Lennox-Gastaut syndrome. It is currently undergoing Phase 3 clinical trials in the United States.

We already acquired significant data that the candidate is effective on adult patients, and based on that data, we are processing trials on children. So it must have a higher chance of success.

Secondly, I have big hopes for SKL27969, a candidate to treat advanced solid tumors that is set to start Phase 1 clinical trials. In the case of most drugs involving the central nervous system, we start clinical trials on healthy people. But for potential cancer treatments, we conduct trials on patients with incurable diseases, which the industry calls terminal patients. So if the patients show any kind of response during the trials, the FDA fast tracks those drug candidates in order to encourage faster development. So the development process for cancer treatments is shorter than the others.

SK Biopharmaceuticals has long been focusing on developing treatments for central nervous system diseases. But with SKL27969, it appears the company is expanding into the cancer treatment area.

Like many people know, the central nervous system has long been our biggest axis. And we thought, now we're ready for a second axis. After thoroughly reviewing the possibilities, we decided to start in the anti-cancer area. The targets for central nervous system drugs and cancer treatments largely overlap, so it was the natural choice.

Of course, we are always searching for more chances for further our business expansion and are always open to new opportunities.

It seems like you are very enthusiastic about the digital health care sector.

Our digital health care project has two main tracks. One is to develop wearable devices that actually help patients. The one thing epilepsy patients are most scared of is having sudden seizures. There are already several wearable devices that detect when patients are having a seizure and automatically send notifications to doctors or guardians.

But we don't think that is enough. What is really essential for patients is informing them in advance when they are in danger of having a seizure. If we can predict one even just five minutes before it starts, we could alert patients to sit down if they're walking or go inside it they're out.

SK Biopharmaceuticals is currently developing such a device. We collect patients’ real-time signals in the brain and let artificial intelligence [AI] analyze the data to find any possible predictable symptoms. I believe we can show some achievements soon. If we succeed, we can probably apply the technology to other brain-related disorders.

The other track of the digital health care project is developing AI platforms that can be utilized in the drug development process. Now, we are just in the process of discovering ways in which we can utilize AI technology in the process of drug development. If AI technology can help in contributing researchers to reduce the time it takes to develop drugs, that will be great.

You mentioned SK is expected to come up with a wearable device that can predict seizures before they happen. How soon will this be available?

Above all, we should be satisfied with it. We have very high standards, and these standards mean that we would actually need to hear patients and their guardians say that they would like to use the device.

I think the question of how soon [we could develop it] is not the most important factor, but rather paying close attention to come up with a good one.

SK Biopharmaceuticals recently signed an agreement with Daejeon-based Biorchestra to cooperate on developing microRNA (miRNA)-targeted therapeutics. What exactly is miRNA treatment and what is SK trying to do with it?

In RNA, there are mRNAs, or messenger ribonucleic acid, which encode proteins, and non-coding RNAs [including miRNA], which don't encode proteins. The prime example of an mRNA treatment would be the Pfizer and Moderna Covid-19 vaccines.

But on a large scale, only 1.5 percent of all human genomes encode proteins. And of those, only 12 percent, or around 3,000 types, of proteins are considered to be related to diseases. But again, of them, the world currently has drugs that use only 700 proteins, which is only some 0.05 percent of the human genome.

Non-coding RNA accounts for 70 percent of the human genome, and microRNA is a part of non-coding RNA. We wanted to develop drugs using a wider range of targets, and we started to look for companies that develop miRNA-based new drugs and found Biorchestra.

RNA is important, but the more important part is the delivery system and how it can be delivered to humans to result in maximum effectiveness. So we wanted to find a partner that has the two key technologies — expertise in RNA-based drugs and the delivery system. Biorchestra has both.

Biorchestra has its own delivery system technology, called BBDS, and has been using it to develop a treatment for Alzheimer’s disease. And we thought that we could use the technology in our candidates, like our epilepsy treatment. Using the expertise each company has, we believe we could open a new field of opportunities in the biopharmaceutical industry.

What sectors do you see as SK Biopharmaceuticals’ next growth engine?

First, all the researchers we’ve been working with every day. Second, the innovative achievements that the company will accomplish together with the researchers.

SK successfully made Cenobamate, but we must make new attempts and new investments. With diversity as our key motto, cancer treatment and microRNA are all part of our attempts.

The critical factor to make that happen is not just a strategy, but our people. These include all our employees who do their best in their positions for the growth of the company, including our researchers, employees conducting clinical trials and software developers.

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