SK bioscience to invest big in vaccines, CDMO over next 5 years

Industry

Published: 28 Apr. 2023, 14:16 Updated: 28 Apr. 2023, 15:40

SK bioscience to invest big in vaccines, CDMO over next 5 years

SK bioscience CEO Ahn Jae-yong speaks about the company's business strategies during a press conference Friday held in central Seoul. [SK BIOSCIENCE]

SK bioscience will invest 2.4 trillion won ($1.8 billion) over five years to strengthen its vaccine and contract development and manufacturing organization (CDMO) businesses, including two possible mergers and acquisitions (M&As).

"The next five years are the time for SK bioscience to make aggressive investments that will determine our future," SK bioscience CEO Ahn Jae-yong said during a press conference in central Seoul on Friday.

"We're eyeing an M&A in the vaccine area, and one in the cell and gene therapy sector."

Of the investment, half will go solely into the research and development in the vaccine sector, Ahn added.

SK bioscience said it will resume production of SkyCellflu, its flu vaccine, which the company had halted for the past two years to focus on developing a Covid-19 vaccine.

Before it halted production of SkyCellflu, the vaccine held the top spot in the local flu vaccine market with a 29 percent share in 2020. SkyCellflu is currently approved in a total of 11 countries and awaiting approvals from 12 countries.

It will expand overseas sales of SKYZoster, the world´s secondly developed shingles vaccine.

SK bioscience hopes to increase its vaccine sales by five-fold by next year, which currently stands at 44 billion won.

The company also plans to develop five more pipelines: vaccines for pneumococcus, human papillomavirus, shingles, coronavirus and respiratory syncytial virus.

SK bioscience researchers check SKYCovione Covid-19 vaccine vials at L House, the company’s vaccine manufacturing facility in Andong, North Gyeongsang. [SK BIOSCIENCE]

"We will discover new business markets through a 'glocalization strategy,' which is to transfer our capabilities of vaccine development and manufacture to other countries," Ahn said.

"Possible candidates are countries in the Middle East, Africa, Southeast Asia and Latin America, and we are planning to sign deals with two countries within the year."

Ahn added that a CDMO deal with a global big pharmaceutical company will be announced in the first half.

A CDMO engages in the early stages of developing a client’s products and also takes charge of mass production.

AstraZeneca and Novavax are two of SK bioscience's largest CDMO clients.

In February, SK bioscience said it will invest 325.7 billion won in building a manufacturing facility in Songdo, Incheon with all necessary equipment to conduct research, as well as a small-size manufacturing plant for pilot products.

Construction will be finished in the first half of 2025. When completed, SK bioscience’s headquarters, which is currently based in Panggyo, Gyeonggi, will be moved there.

SK bioscience swung to 14.2 billion won of net loss in the first quarter, the worst quarterly performance since it was split off from SK Chemicals in July 2019.

The company's operating loss came in at 29.2 billion won, while revenues plunged 76.4 percent to 20.6 billion won.

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