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‘CMO’ a rising keyword in biologics, vaccine industry

Hanmi eyed as potential Moderna vaccine contract manufacturer in Korea, while SK seeks acquisition of French cell and gene CMO Yposkesi

A researcher looking into vaccine candidates. (SK Bioscience)
A researcher looking into vaccine candidates. (SK Bioscience)
If South Korea has not yet earned itself the moniker of the world’s biologics and vaccine factory, it appears committed to winning the title.

As of Tuesday, rumors abound that the country’s Hanmi Pharmaceutical is being weighed as a potential contract manufacturer of the Moderna vaccine for COVID-19. Hanmi’s Plant No. 2 in Pyeongtaek, Gyeonggi Province, can put out an annual volume of 100 million doses of DNA vaccine and 1 billion doses of messenger RNA vaccine. The plant was built in 2018 for a diabetes drug whose development has since been discontinued. It is waiting to run its first operation.

“At Plant No. 2, we have the capacity to produce the Moderna vaccine from the active ingredient to fill and finish, should Moderna outlicense the manual on how to manufacture the vaccine. However, nothing is determined with Moderna and we cannot say any further,” a Hanmi official told The Korea Herald.

Other local companies GC Pharma and LG Chem offer a “fill and finish service,” which would involve bringing in the Moderna vaccine after it has already been produced overseas and simply putting it in vials in Korea.

Binex, a professional CMO company, has the facilities to produce vaccines, but could not say anything about the Moderna vaccine, citing the sensitivity of the issue and fluctuations in its stock price.

Moderna as of Thursday has come to a supply agreement with the Korean government to provide 40 million doses of its vaccine “as soon as possible.” The Korean government anticipates distributing the Moderna vaccine by May.

Moderna’s CEO Stephane Bancel is quoted as having expressed confidence in Korea’s contract manufacturing, or CMO, facilities in his one-on-one conversation with President Moon Jae-in.

Elsewhere, Moderna is partnered with Lonza for production in the US and Switzerland. Fill-finish services are provided by Catalent in the US, and by ROVI and Recipharm outside the US.

Moderna said in a press release Monday that it will increase its base-case global production estimate from 500 million to 600 million doses for 2021. It will continue to invest and add staff to make potentially up to 1 billion doses for 2021, the company said.

Contract manufacturing of biologic materials is a rising business keyword in Korea following the successes of Celltrion and Samsung Biologics.

Especially due to COVID-19, whereupon the world is in need of large volumes of drugs in a short span of time, drug developers are combing out reliable factories around the globe to which they can entrust the production of their vaccines and treatments.

Currently, Korea has agreements in place for enough COVID-19 vaccines for 56 million people -- exceeding its population of some 51.6 million people -- from AstraZeneca, Pfizer, Janssen, Moderna and the global COVAX facility.

Of the vaccines Korea has secured so far, Moderna’s and Pfizer’s are messenger RNA vaccines and Janssen’s and AstraZeneca’s are viral vector vaccines. The vaccines from COVAX will comprise those from AstraZeneca, Pfizer and Sanofi. It is worth noting that the vaccines from Pfizer, Moderna and AstraZeneca have to be injected in two doses.

The types of vaccines matter for contract manufacturers, in terms of both the technology needed to produce the vaccine and the equipment and facilities required.

According to popular opinion, it would be more cost- and time-efficient for drug developers to manufacture the vaccines locally via partner CMOs, rather than go through a complicated shipping process. But for that to happen, the local facilities must have the proper equipment and must pass a best practices evaluation.

And on that front, there is upbeat sentiment in Korea in regards to the country’s newfound business potential as a biologics and vaccine CMO hub.

The first to bring in the good news was SK Bioscience, the vaccine-making arm of SK Group, which won deals to contract-manufacture AstraZeneca’s and Novavax’s coronavirus vaccines.

As SK Bioscience had begun preliminarily manufacturing the AstraZeneca vaccine, despite the vaccine having seen slower clinical trial results, it is set to be the first distributed within Korea.

GC Pharma, another to ride the bandwagon, has a deal with the Coalition for Epidemic Preparedness Innovations for use of its Korean facility.

Celltrion and Samsung Biologics, the country’s leading biologics companies and CMOs, so far only have the facilities to produce antibodies, not vaccines.

Celltrion is counting down to emergency use approval for its original COVID-19 treatment regdanvimab, while Samsung Biologics is contract-manufacturing Eli Lilly’s COVID-19 antibody drug.

Albeit without the ability to produce vaccines, the two companies are the blazing leaders of Korea’s bio frontier. Samsung Biologics, once its fourth plant completes construction in 2023, will account for 30 percent of the world’s CMO market at a combined 620,000-liter output.

Celltrion, albeit occupied with manufacturing its own autoimmune biosimilars at its plants, is also building a third plant. Once it’s completed in 2023, the company will have a total output capacity of 250,000 liters.

Trailing behind Celltrion and Samsung Biologics, but at a formidable size, is SK Group’s global CMO arm SK Pharmteco.

SK Pharmteco, formerly the US’ Ampac Fine Chemicals, is a consolidated CMO established in September 2019 comprising Ampac, SK Biotek Korea and SK Biotek Ireland.

It is now closing in to acquire Yposkesi, a French cell and gene therapy CMO, within the first half of 2021.

With the probable addition of Yposkesi to its portfolio, SK Pharmteco will evolve from a chemical drugs-only CMO to one that covers bio.

Analyst Choi Nam-kon of Yuanta Securities Korea said in a report that while SK Pharmteco’s current market value is estimated between just 2.5 trillion won ($2.29 billion) and 3.5 trillion won based on its annual revenue of 700 billion won and EBITDA of 200 billion won, with the acquisition of Yposkesi it could experience a more positive reevaluation.

Celltrion’s market cap as of Tuesday is estimated at 47.8 trillion won and Samsung Biologics’ at 55.4 trillion won.

An SK Holdings official could not provide an answer when asked if the acquisition of Yposkesi could lead to an opportunity for SK Pharmteco to win a COVID-19 vaccine CMO deal in France.

By Lim Jeong-yeo (kaylalim@heraldcorp.com)
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