Korean pharma companies aim to get situated in cell and gene therapy market

Industry

Published: 05 May. 2022, 15:56

Korean pharma companies aim to get situated in cell and gene therapy market

An Yposkesi researcher conducts tests at the company's lab in Corbeil-essonnes, France. [SK INC.]

Korean pharmaceutical companies are making big bets on the cell and gene therapy market, the sector that many consider to be the next game-changer in the global pharma world.

Cellular and gene therapies both use the human body’s cells and genetic information to fight diseases. Cell therapy aims to treat diseases by restoring or altering certain sets of cells or by using cells to carry a treatment through the body, while gene therapy seeks to modify or manipulate the expression of a gene or to alter the biological properties of living cells for treatment use, according to the U.S. Food and Drug Administration (FDA). They can offer a personalized approach and maximize efficacy by reducing side effects.

But the development of such therapies requires a high level of technology compared to existing pharmaceuticals as they directly deal with human cells and genes. There are high barriers to entering the market, and the demand for outsourcing is growing, which boosts the contract and development manufacturing organization (CDMO) business.

CDMOs engage in the early stages of developing a client’s products and also take charge of mass production.

For the research and development of cell and gene therapy, around 60 percent is outsourced, while the percentage stands at around 20 percent for general pharmaceutical products, according to industry sources.

“It is not easy for companies to proceed with cell and gene therapy development by solely using their own technology, so lots of global firms are expanding their investment to outsource,” Kim Yong-min, researcher at the Korea Health Industry Development Institute, wrote in a recent report. “Korean companies must consider aggressive investment in the research and development, license-in deals, or merger and acquisition [M&A] plans.”

Only 88 cell and gene therapy products have been approved globally so far, of which 49 are being sold. Biogen’s Spinraza spinal muscular atrophy treatment, Novartis’ leukemia treatment Kymriah and Gilead Sciences’ lymphoma treatment Yescarta are a few blockbuster drugs in the industry.

The size of the global cell and gene therapy CDMO market, which was valued at $1.5 billion in 2019, is expected to grow at an annual rate of 31 percent and reach $10.1 billion in 2026, according to data provided by market research firm Frost & Sullivan.

On April 20, GC Cell said it bought New Jersey-based BioCentriq for 90 billion won ($73 million), aiming to strengthen its presence in the global gene and cell therapy market.

Founded in 2019, BioCentriq is a CDMO specializing in gene and cell therapy. GC Cell and GC formed a joint venture for the acquisition of the U.S. CDMO company. GC invested $53 million and GC Cell $20 million.

SK Inc. in 2019 established SK Pharmteco, its U.S. CDMO subsidiary based in California, with the goal of becoming one of the top-five CDMO companies specializing in gene and cell therapies. In March last year, SK Pharmteco acquired 70 percent of Yposkesi, a Corbeil Essonnes, France-based CDMO focusing on cell and gene therapy.

Yposkesi's factory in Genopole, France. [SK INC.]

In January, SK Inc. invested $350 million in the Center for Breakthrough Medicines (CBM), becoming the second largest shareholder of the Philadelphia-based CDMO specializing in cell and gene therapy. Its wholly-owned subsidiary SK Pharmteco took over the share of CBM, though the amount of shares has not been disclosed.

SK bioscience CEO Ahn Jae-yong also hinted at acquiring firms that have the technology to develop cell and gene therapy during a press conference on March 31. SK bioscience is widely known as a Covid-19 vaccine maker in Korea.

Last year, CJ CheilJedang acquired 76 percent of Leiden, Netherlands-based CDMO Batavia Bioscience for 267.7 billion won.

Some Korean companies are rushing investment into the sector by expanding their own manufacturing capacity.

CHA Medical & Bio Group recently began constructing a $250 million cell and gene manufacturing facility in Pangyo, Gyeonggi.

The company is calling the facility Cell Gene Biobank. The 10-story building with four basement floors will have CDMO facilities for cell and gene therapy and a storage facility for stem cells. The storage facility can save all kinds of human cells such as stem cells, blood cells, ova and sperm, according to the company.

The construction is expected to be completed by the end of 2024.

Earlier in the year, Samsung Biologics said it plans to start construction on its fifth factory in Songdo, Incheon, which will be a space for cell and gene therapies, in the first half. The company already bought a site for the factory.

“Cell and gene therapy is a sector in which Korea’s technology doesn’t fall far behind that of foreign countries,” Lim Yoon-jin, an analyst at Daishin Securities, said. “It is highly anticipated that Korean companies will acquire a competitive edge very rapidly by entering the CDMO business.”