With $900M IPO, SK Bioscience has big plans for manufacturing expansion—even beyond COVID-19 vaccines

SK Bioscience made a major score last week when it unveiled a lucrative coronavirus vaccine deal with Novavax. Just six days later, SK announced a plan that ups the ante—to the tune of $900 million.

When the contract drug manufacturer launches an initial public offering on the Korea Exchange next month, it expects to raise that amount, CEO Ahn Jae-yong said in a news conference, and it has big plans for spending it.

The company, a subsidiary of the SK Group, plans to invest $360 million in domestic facilities and $90 million on expanding overseas. It also has earmarked $180 million for R&D in a joint effort with French drugmaker Sanofi to develop a pneumococcal COVID-19 vaccine.

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The company has two coronavirus vaccines already in the works, one of which will enter phase 3 testing in the second half of this year with hopes of gaining authorization in early 2022.

Ahn said he expects the demand for COVID-19 shots to continue well into the future because of the relatively short duration of antibodies.

Since late last year, SK Bioscience has been churning out COVID-19 vaccines after making a deal with AstraZeneca. The recent agreement with Novavax expands on an existing manufacturing arrangement between the two. The new deal calls for SK to produce 40 million vaccines for sale to the Korean government.

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“We are receiving CMO requests from global pharma companies even when our nine vaccine production lines at the Andong plant are running at full capacity,” said Ahn, who added that manufacturing orders have recently emerged from Sanofi and GlaxoSmithKline.

It all adds up to SK Bioscience hoping to parlay its response to the coronavirus pandemic into a strong, profitable future.

“We plan to secure other platform technologies such as messenger RNA"—the technology Pfizer and Moderna use in their COVID-19 vaccines—"and expand the contract manufacture business of biopharmaceuticals other than vaccines,” Ahn said. “We will grow into a global bio platform hub as we expand our business overseas based on experience producing medicines, including vaccines.”