Bristol-Myers Squibb, which is shifting its focus toward biologics manufacturing, will unload an API plant in Ireland to a South Korean company that has aspirations of becoming a big deal in contract manufacturing.
The U.S. drugmaker said today that it will sell its plant in Swords to SK Biotek, a unit of South Korea’s third largest conglomerate, SK Holdings. SK has been a BMS ingredient supplier for a decade.
The two kept terms under wraps except to say the deal should close in Q4 and that SK will continue to produce the products BMS now makes at the plant, which includes the API for Bristol-Myers Squibb and Pfizer’s anticoagulant Eliquis. SK Biotek will take on about 300 workers at the facility, while some will transfer to jobs in Dublin, a BMS spokesman said in an email.
SK Biotek, the first South Korean company to set up shop in Ireland, will use the BMS plant as a base for its burgeoning contract development and manufacturing business. It plans to add marketing and research and development operations at the site, as well as spend money on upgrades to boost capacity.
“This transaction is an important step to achieve our goal of becoming a leading global CDMO,” SK Biotek CEO Junku Park said in a statement.
SK Holdings, which has revenues that top $120 billion, has decided that contract pharma manufacturing is a natural offshoot of its chemical and ingredient businesses and has identified it as a growth driver for the company. It has four plants in South Korea, according to its website, and SK Biotek had 2015 revenues of KRW 75.5 billion ($6.6 million). It says it expects the unit to reach KRW 130 billion in sales this year. It has said it would like to someday rival CDMOs like Lonza and Boehringer Ingelheim.
Last year, SK Holdings indicated it was working on a couple of deals, worth about $500 million each, to buy API sites in the U.S. and Europe.
Like other big drugmakers, BMS has been scaling back in small-molecule production. In 2015, it closed an API plant at Cruiserath in North County Dublin and shut down a production line at the plant in Swords. That has happened as its pipeline of products shifted toward biologic drugs. It is building a $900 million, 320,000-square-foot biologics plant adjacent to a bulk manufacturing facility in Dublin.
“Today’s agreement is an important step in the ongoing evolution of our manufacturing network to support the company’s innovative portfolio,” Lou Schmukler, BMS president of global product development and supply, said in a statement.